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US budget carrier Spirit Airlines files for bankruptcy amid severe financial losses
US low-cost carrier Spirit Airlines grappling with financial woes on Monday announced it had filed for bankruptcy.
US low-cost carrier Spirit Airlines grappling with financial woes on Monday announced it had filed for bankruptcy as part of a restructuring agreement with its creditors.
It said it had agreed with a majority of its creditors to reduce its debt, through the injection of $350 million from existing bondholders.
"Spirit has received backstopped commitments for a $350 million equity investment from existing bondholders and will complete a deleveraging transaction to equitize $795 million of funded debt," it said in a statement.
Spirit, which filed for bankruptcy under a simplified Chapter 11 process, said it planned to continue operating throughout this procedure, and that passengers can "continue to book and fly without interruption" including using their credits and loyalty points.
Workers will continue to be paid and so will suppliers and aircraft lessors, it said.
Spirit also said it expects to be delisted from the New York Stock Exchange "in the near term" without specifying a date.
Its shares have plunged by almost 90 percent over the past year.
The Florida-based group, which posted 11 consecutive quarters of losses as of August indicated earlier this month that it would not be able to publish its results for the third quarter of 2024.
Spirit had increased its capacity and market share in the post-Covid era, but faced increased competition from other carriers which resulted in an oversupply.
A potential merger with Frontier Airlines failed in 2022, due to a competing bid by JetBlue.
Earlier this year, JetBlue and Spirit Airlines pulled the plug on their merger weeks after a federal judge ruled that it violated US antitrust law.
