Spirit Airlines Files for Bankruptcy
Spirit Airlines has filed for bankruptcy protection, which is something that has been rumored for months. The company said Monday that it will attempt to reboot as it struggles to recover from the pandemic-caused swoon in travel, competition from legacy carriers, and the failed merger with JetBlue.
Spirit is the largest budget airline in the country but has lost more than $2.5 billion since the start of 2020. It was facing debt payments totaling more than $1 billion in 2025 and 2026.
The airline says it has worked out terms with bondholders and expects to continue operating normally during the bankruptcy process. Spirit told customers Monday that they can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal.
The airline has received commitments for a $350 million equity investment from existing bondholders and will convert $795 million of their debt into stock in the restructured company. Bondholders will also extend a $300 million loan that, combined with Spirit’s remaining cash, will help the airline get through the restructuring.
“I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan,” said Ted Christie, Spirit’s President and Chief Executive Officer. “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. I’m extremely proud of the Spirit team’s hard work and dedication, which is key to our sustained progress in advancing our business and delivering for our Guests.”
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