Spirit Airlines has filed for Chapter 11 bankruptcy protection, marking the first major US airline bankruptcy in over a decade. The move follows a failed merger attempt with JetBlue Airways, which a federal judge blocked in January on antitrust grounds.
The budget carrier—which has accumulated over $2.5B in debt since 2020—reported a loss of more than $335M in the first half of 2024 and faces debt payments totaling more than $1B in 2025 and 2026. It has faced financial pressures due to the COVID-19 pandemic, rising fuel costs, labor shortages, increased competition, and an engine recall that grounded dozens of its jets.
The filing is backed by existing bondholders with $350M in equity investment and it plans to convert $795M of debt into stock. Additionally, the bondholders will provide $300M in debtor-in-possession financing. Spirit aims to complete the restructuring process by the first quarter of 2025.
The company's shares have fallen more than 90% year-to-date.
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