Spirit Airlines Files for Chapter 11 Bankruptcy

Spirit Airlines has filed for pre-arranged Chapter 11 bankruptcy protection, aiming to restructure and emerge by the first quarter of 2025 with support from bondholders, who are providing $350 million in equity investment and $300 million in debtor-in-possession financing. The airline, which has incurred losses exceeding $2.5 billion since 2020 and faces over $1 billion in debt payments due in the coming year, will continue operations as usual, allowing customers to book flights and use loyalty points without interruption. Spirit's financial struggles were exacerbated by a failed merger with JetBlue and rising competition among budget carriers, leading to significant revenue declines despite an increase in passenger numbers. CEO Ted Christie expressed optimism for a revitalized business post-restructuring while acknowledging the challenges ahead. The bankruptcy filing, while a setback, follows a common industry pattern that could lead to a stronger financial position in the future. Spirit's estimated assets and liabilities are between $1 billion and $10 billion each, indicating substantial fiscal challenges.