Spirit Airlines, a low-cost carrier providing services to 47 domestic destinations within the United States and 28 international destinations, which encompass airports located in the Caribbean and Latin America, has announced today its filing for Chapter 11 bankruptcy protection in the US Bankruptcy Court located in the Southern District of New York.
Chapter 11 bankruptcy is often utilized by businesses as a means to facilitate financial restructuring.
As per the court documents, Spirit has reported its estimated assets and liabilities to fall between $1 billion and $10 billion.
The carrier announced that it will also be removed from the New York Stock Exchange following the Chapter 11 bankruptcy protection filing.
In a statement to the stock market, Spirit Airlines stated that it has reached a prearranged agreement with bondholders, which encompasses $300 million in financing to ensure its continued operation. The carrier intends to emerge from the bankruptcy proceedings by Q1 of 2025.
Spirit’s action was apparently triggered by substantial financial difficulties stemming from increasing losses and upcoming debt maturities, following its recent unsuccessful merger attempts with Frontier Airlines and JetBlue Airways —resulting in significant challenges for the ultra-low-cost carrier due to ongoing quarterly losses.
The company’s efforts to generate much needed funds, which included workforce reductions and the sale of aircraft, have also failed.
Spirit Airlines last recorded a profit in the year 2019.
Spirit Airlines has become the first large American air carrier to seek Chapter 11 bankruptcy protection since American Airlines did so more than a decade ago.
THE OPEN LETTER SENT BY SPIRIT AIRLINES TO ITS CUSTOMERS:
“We are writing to let you know about a proactive step Spirit has taken to position the company for success. Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a “prearranged” chapter 11.
The most important thing to know is that you can continue to book and fly now and in the future.
We also want to assure you:
- You can use all tickets, credits and loyalty points as normal.
- You can continue to benefit from our Free Spirit loyalty program, Saver$ Club perks and credit card terms.
- Our amazing Team Members are here to offer you excellent service and an elevated experience.
We expect to complete this process in the first quarter of 2025 and emerge even better positioned to deliver the best value in the sky. Other airlines that are operating successfully today have undertaken a similar process. For more information about our financial restructuring, please visit www.SpiritGoForward.com.
We’re grateful you continue to choose Spirit for your travel needs. As we head into the holiday season and beyond, we look forward to welcoming you on board again soon.”
* Spirit Airlines, Inc., stylized as spirit, is an ultra-low cost airline headquartered in Dania Beach, Florida, in the Miami metropolitan area. Spirit operates scheduled flights throughout the United States, the Caribbean, and Latin America. Spirit was the seventh largest passenger carrier in North America as of 2023, as well as the largest ultra-low-cost carrier in North America.