Spirit Airlines said Monday it has filed for Chapter 11 bankruptcy protection after having struggled with losses, growing debt and a failed merger during the post-pandemic travel lull.
The company said in a stock market statement that it had secured a prearranged deal with bondholders that includes $300 million in financing to keep it afloat, with the business planning to end its bankruptcy in the first quarter of 2025.
Ticket sales and all other operations will continue as normal, the company said in the statement just 10 days before record numbers of travelers are expected to take to the skies over Thanksgiving.
“I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan,” Spirit CEO and President Ted Christie said in a statement.
He said in a letter to customers, “The most important thing to know is that you can continue to book and fly now and in the future.”
Spirit, based in Dania Beach, Florida, had already deferred $1.1 billion in debt payments until next year. It was last profitable in 2019.
The deal comes with a commitment of $350 million in equity investment from bondholders, which it said equates to $795 million of outstanding debt.
The company’s share price fell from $3.22 to $1.15 last week after The Wall Street Journal reported it was preparing to file for bankruptcy protection, closing at $1.07 on Friday.
The company has had a tumultuous few years, with an engine recall last year and a U.S. district judge blocking a proposed $3.8 billion merger with JetBlue in January. Spirit said last month it would cut jobs and sell 23 older planes in a bid to save $80 million.
Industry analysts said at the time that the court’s decision left Spirit with few options but to face a likely restructuring and bankruptcy.
