Spirit Airlines files for bankruptcy protection, promises to keep flying

Spirit Airlines (Spirit), a US budget carrier, has filed for Chapter 11 bankruptcy protection after accumulating over US$2.5 billion in losses since 2020, REUTERS has reported. Despite its financial struggles, the airline has assured customers that operations will continue without disruption, including ticket bookings and loyalty programmes.

The airline announced a “restructuring support agreement” backed by a supermajority of its bondholders to reduce debt, enhance financial flexibility and invest in passenger experience. Spirit aims to emerge from this process, which it expects to complete by the first quarter of 2025, better positioned for long-term success.

The bankruptcy filing follows failed merger attempts, declining stock value, and reduced income amid higher operational expenses. To facilitate the restructuring, Spirit said that it had reached a deal with bondholders for US$350 million in equity and that noteholders will swap US$795 million for equity. An additional US$300 million debtor-in-possession funding, combined with Spirit’s cash reserves, will support the airline during this period.

Ted Christie, Spirit’s president and CEO, expressed optimism, highlighting the bondholders’ confidence in the airline’s recovery plan and the dedication of Spirit’s workforce. The airline emphasised that the bankruptcy process will not affect employee or vendor wages and benefits.

While Spirit expects to be delisted from the New York Stock Exchange in the near future, it remains committed to delivering value to its customers and cited examples of other airlines successfully navigating similar bankruptcy processes.