Spirit Airlines has filed for Chapter 11 bankruptcy protection, the company announced Monday, citing mounting debt, persistent losses, and the collapse of a merger deal with JetBlue as key factors. The low-cost carrier plans to emerge from bankruptcy in the first quarter of 2025 with $300 million in financing secured under a prearranged agreement with bondholders.
Despite the financial setback, Spirit assured customers that its operations, including ticket sales, will continue uninterrupted. This announcement comes just days before the Thanksgiving travel rush, which is expected to see record-breaking passenger numbers.
“Our agreement with bondholders reflects their confidence in Spirit’s long-term strategy,” said CEO Ted Christie. “Travelers can continue to book and fly with us as usual.”
Spirit’s financial struggles have been mounting since the pandemic, with the company last reporting a profit in 2019. It recently deferred $1.1 billion in debt payments to 2024 and is also receiving $350 million in equity investment, which will address $795 million of outstanding debt.
The airline’s challenges have been compounded by an engine recall in 2022 and a court ruling that blocked its $3.8 billion merger with JetBlue in January. In response, Spirit announced job cuts and the sale of 23 older planes, targeting $80 million in savings.
Shares of the Florida-based airline plummeted last week after reports of its bankruptcy plans emerged, closing at $1.07 on Friday, a sharp drop from $3.22 earlier in the week.
Industry analysts believe the restructuring may offer Spirit a lifeline, though its future in a competitive aviation market remains uncertain.
%20(1).jpg)
.png)
.png)
.png)