OAN Staff Abril Elfi
5:48 PM – Monday, November 18, 2024
Spirit Airlines has filed for Chapter 11 bankruptcy protection due to financial struggles.
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On Monday, the airline announced the filing due to mounting losses and debt maturities.
The filing comes after two failed mergers in less than two years – one with Frontier recently and another with JetBlue earlier in 2024 – which left the ultra-low-cost carrier in a bind following consecutive quarterly losses.
In October, Spirit announced plans to sell multiple aircraft and lay off employees in order to raise funds and revive operations.
Spirit Airlines President and CEO Ted Christie announced that the airline has reached an agreement with its bondholders that is expected to reduce the company’s total debt and increase financial flexibility.
“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,” Christie said in a news release. “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.”
The court filing listed their estimated assets and liabilities in the range of $1 billion to $10 billion each.
As part of the prearranged Chapter 11 bankruptcy protection, Spirit Airlines has received a commitment for a $350 million equity investment from existing bondholders. The bondholders will also provide $300 million in debtor-in-possession (DIP) financing with its available cash.
Spirit stock shares will be canceled and have no value as part of the airline’s restructuring, following its delisting from the New York Stock Exchange “in the near term.”
They also announced that customers will still be able to book flights and fly as normal. Additionally, all tickets, credits, and loyalty points can be used as well.
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