Spirit Airlines Files for Fresh Bankruptcy Protection, Vows Continued Operations
Spirit Airlines Files for Fresh Bankruptcy Protection, Vows Continued Operations
Budget carrier Spirit Airlines announced Friday it has filed for new bankruptcy protection, just months after emerging from a previous Chapter 11 reorganization. Despite the filing, the airline assures passengers that flights will operate as usual, allowing customers to book trips and utilize tickets, credits, and loyalty points without disruption. Employees and contractors are also expected to continue receiving payments.
CEO Dave Davis explained that while the airline’s initial Chapter 11 petition focused on debt reduction and capital raising, it became clear more extensive measures were needed to secure Spirit’s future. However, the Association of Flight Attendants has cautioned its members to “prepare for all possible scenarios,” emphasizing the need for truth and preparedness amidst the situation.
Spirit Airlines has faced significant financial headwinds since the COVID-19 pandemic, struggling with rising operational costs and mounting debt. The airline carries $2.4 billion in long-term debt and reported a negative free cash flow of $1 billion at the end of the second quarter. This latest move follows a previous Chapter 11 filing last November, after which the company lost over $2.5 billion since early 2020.
The company, known for its distinctive yellow planes, had previously expressed “substantial doubt” about its ability to remain in business over the next year, citing adverse market conditions including poor demand for domestic leisure travel and ongoing business uncertainties expected through late 2025. Cost-cutting measures, including planned furloughs of pilots and downgrades for captains set for October and November, were already underway. Spirit is also considering selling off certain aircraft and real estate to raise needed capital.
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