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UPDATE: Spirit Airlines Files For Bankruptcy
Ultra-low-cost carrier Spirit Airlines has officially filed for bankruptcy protection as the airline faces mounting losses and debts.
Spirit has struggled since a planned merger with JetBlue Airways earlier this year collapsed after a court ruling blocked the $3.8 billion acquisition.
“Spirit listed its assets and liabilities between $1 billion and $10 billion, in a court filing,” CNBC stated.
CEO Ted Christie said the airline expects to continue operating and attempted to reassure customers they can still book tickets, fly, and use loyalty points on the budget carrier.
“The most important thing to know is that you can continue to book and fly now and in the future,” Christie said, according to CNBC.
This morning Spirit Airlines filed for bankruptcy.
Eight months ago, the Biden DOJ bragged about "protecting consumers" by nuking Spirit's merger with JetBlue.
Everything government touches dies. pic.twitter.com/eVkUZPpB2y
— Bonchie (@bonchieredstate) November 18, 2024
Per CNBC:
The Dania Beach, Florida-based airline had struggled with an engine recall that grounded dozens of its jets, a surge in costs after the pandemic, and the failure of its planned acquisition by JetBlue Airways, which was blocked by a federal judge earlier this year on antitrust grounds. Its shares have fallen more than 90% this year.
The airline had repeatedly pushed back a deadline with its credit card processor to renegotiate $1.1 billion in loyalty bonds due next year or risk losing the ability to process transactions.
It said Monday that it had reached a deal with bondholders for $350 million in equity and that noteholders will swap $795 million for equity. Spirit’s stock will be delisted from the New York Stock Exchange as a result of its filing, in the U.S. Bankruptcy Court of the Southern District of New York.
Last week, Spirit said it had to delay its quarterly filing and said it was in discussions for a deal with a majority of creditors that would not affect customers, vendors, suppliers and others, but that would wipe out the company’s existing equity.
Spirit Airlines files for bankruptcy as financial losses pile up and debt payments loom https://t.co/KdSYjjAbPZ pic.twitter.com/ZjdBTJNesr
— New York Post (@nypost) November 18, 2024
As anticipated, struggling Spirit Airlines has finally filed for the Chapter 11 bankruptcy on Monday, just months after its merger with JetBlue collapsed and attempts to join Frontier did not materialize.
Previous post :https://t.co/lQR0l3Ezv7#Airlines pic.twitter.com/WZS5gzJlpy
— FL360aero (@fl360aero) November 18, 2024
Fox Business reports:
The Points Guy founder Brian Kelly said filing for bankruptcy doesn’t mean the company is “closing up shop,” a message he believes Spirit is trying to convey to its customers.
“They need consumers to be confident in the airline,” Kelly told FOX Business. “They’re already struggling as it is today, so if people start booking on other carriers, that’s going to spell even more trouble for the airline. And they clearly want to survive this process.”
Despite the airlines’ reassurances, Kelly believes that travelers will inevitably feel the impact.
He pointed to the fact that Spirit has already cut back on different routes, announced plans to furlough pilots and sell aircraft.
In a Securities and Exchange Commission filing last month, the ultra-low-cost carrier said it identified approximately $80 million in annualized cost reductions that it plans to implement next year.
This won’t necessarily impact holiday travel, but it could impact future 2025 travel plans, according to Kelly.
“What that means for the traveler is if you booked far out on Spirit, there’s a very good chance your flight time may get drastically changed or your flight canceled altogether,” he said.
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