Ultra-low-cost carrier (ULCC) Spirit Airlines has filed for Chapter 11 bankruptcy protection due to mounting losses and debt maturities, the airline announced Monday. The filing comes after two failed mergers in less than two years – one recently with Frontier...
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Ultra-low-cost carrier (ULCC) Spirit Airlines has filed for Chapter 11 bankruptcy protection due to mounting losses and debt maturities, the airline announced Monday.
The filing comes after two failed mergers in less than two years – one recently with Frontier and another earlier in 2024 with JetBlue. Last month, the carrier had announced plans to sell multiple aircraft and lay off workers.
Spirit Airlines President and CEO Ted Christie said the airline has entered into an agreement with its bondholders that is expected to reduce the company's total debt and provide increased financial flexibility. "This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our guest experience, providing new enhanced travel options, greater value and increased flexibility," Christie said.
The airline listed its estimated assets and liabilities in the range of $1 billion to $10 billion each, according to a court filing on Monday. The airline, as part of the prearranged Chapter 11 bankruptcy protection, has received a commitment for a $350 million equity investment from existing bondholders. It will also complete a deleveraging transaction to equitize $795 million of funded debt.
The airline expects to continue operating its business in the normal course throughout the prearranged, streamlined chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal. The chapter 11 process itself will not impact Team Member wages or benefits, which are continuing to be paid and honored for those employed by Spirit.
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