Spirit Airlines Approves $795 Million Debt Restructuring Plan

Spirit Airlines has received court approval for its reorganization plan, allowing the airline to convert $795 million of funded debt into equity and secure a $350 million new equity investment as it prepares to exit Chapter 11 bankruptcy. This plan, approved by the U.S. Bankruptcy Court for the Southern District of New York on February 20, 2025, aims to strengthen the airline's financial position and enhance guest experiences. Despite objections from the SEC and the Office of the U.S. Trustee regarding legal claims releases, the court has cleared the way for Spirit to continue its operations without disruption. The restructuring plan includes issuing $840 million in new senior secured debt and establishing a $300 million revolving credit facility. Spirit's leadership expressed confidence in emerging as a stronger airline with support from bondholders. The airline has faced significant challenges, including a failed merger with JetBlue and a substantial drop in stock price, but remains focused on building a sustainable business model post-bankruptcy.