The airline industry is betting against Spirit Airlines.

“If Spirit suddenly goes out of business it will be incredibly disruptive, so we’re adding these flights to give their customers other options if they want or need them,” said Patrick Quayle, United’s head of network planning and alliances.

Frontier, which is gunning for Spirit’s position as the largest U.S. ultradiscounter, has seized on Spirit’s pullback, announcing plans to add service along several routes Spirit serves.

“We want to be America’s low-fare airline,” said Frontier Chief Executive Barry Biffle. “And we see an opportunity.”

Spirit, which filed for chapter 11 bankruptcy last week, has assured customers they can continue to book future flights and use their tickets. Chairman Robert Milton said in a recent interview the airline has no intention of liquidating: “It needs its costs restructured and to get its mojo back.”

Spirit for years played the role of an airline industry maverick, charging ultralow fares with fees for almost everything.

A Spirit spokesman on Thursday described United’s plans as “wishful thinking” from an airline that wants to drive a low-cost competitor out of business in order to charge more.

“While we appreciate the obsession certain airline executives have with us, we’re focused on competing and running a great operation,” he said.

But even a weakened Spirit is good news for competitors, which stand to benefit from reduced supply of seats.

In years past, Spirit has played the role of an industry maverick. It was willing to fly its bright yellow planes into big cities and go head-to-head with the legacy airlines. Its nickel-and-dime approach to sales—charging bargain basement fares with fees for almost everything—sometimes annoyed customers. But it also forced competitors to lower fares, and in many cases, adopt similar practices.

Now Spirit plans to shrink its fleet and retrench to key cities such as Orlando, Fort Lauderdale and Detroit. It announced this week that it is pulling out of 11 cities and scrapping plans to add service to one more—about 4.5% of its planned flights.

A three-year saga of failed mergers, changing postpandemic travel patterns, and new competitive weapons deployed by big airlines brought Spirit to this point. Spirit’s losses since the beginning of 2020 have more than wiped out all the profits it made since 2006, when it shifted to embrace the ultradiscount model.

Struggling to find its footing after a federal judge last year struck down a $3.8 billion acquisition by JetBlue Airways, Spirit filed for its first bankruptcy in November. But it didn’t seek to use the power of chapter 11 to renegotiate contracts with aircraft lessors or other obligations, as other airlines have historically done after filing for bankruptcy.

The company opted instead for a quick balance-sheet fix that minimized its time spent under court protection, hoping to avoid a lengthy and expensive process. The earlier bankruptcy only affected Spirit bondholders, which swapped nearly $800 million in debt for equity ownership of the business, while leaving more than $2 billion of debt outstanding.

Spirit recently said it is pulling out of 11 cities and scrapping plans to add service to one more.

“Unfortunately, the industry-wide headwinds that preceded the Prior Chapter 11 Cases did not abate; rather, they intensified,” Chief Financial Officer Fred Cromer wrote in a court filing over the weekend. Instead of the $252 million in profit Spirit had projected for 2025, it reported in August that it had lost more than $256 million since mid-March.

Spirit had started to warn of its dire straits last month and was scrambling to bolster its cash balances. It drew down $275 million on its revolving credit facility and completed a series of sale-leaseback transactions in July and August that brought in approximately $250 million.

Then last week, AerCap, Spirit’s largest lessor, notified the carrier it was terminating leases for 36 planes scheduled for delivery in the coming years, and said Spirit was also in default on more than three dozen planes already in its fleet.

Worried that the disclosure of the notices would panic other creditors, the airline decided it had no choice but to file for chapter 11 bankruptcy protection again.

Spirit denied that it had defaulted on any of the leases. It said it is negotiating with AerCap to resolve the issue and is prepared to litigate the matter. An AerCap representative didn’t respond to requests for comment.

The company is burning through cash fast. Spirit disclosed a projection showing that it expects to burn $179 million for the first month of the bankruptcy case. Cromer said in court papers that the airline is continuing to work with certain bondholders on an agreement that would allow access to “significant additional liquidity.”

Spirit has said this time will be different.

In a bankruptcy court appearance Tuesday, Spirit lawyer Marshall Huebner characterized the recent filing as “really Spirit’s first chapter 11, not its second.” Spirit intends to use the powers of the bankruptcy code to walk away from certain contracts, shrink its aircraft fleet and reduce its operating costs, Huebner said in court.

Once the process is complete, “Spirit will once again be the disruptive maverick that has long challenged—and changed—the U.S. aviation industry,” Cromer wrote.

Write to Alison Sider at alison.sider@wsj.com and Alexander Gladstone at alexander.gladstone@wsj.com