Spirit, the previously often mean-spirited airline, has filed for Chapter 11 (let’s hope that it doesn’t turn into Chapter 9) bankruptcy protection after failing to renegotiate its existing debt.
The airline recently tried to merge with Jet Blue, but it was blocked. It also couldn’t reach a deal with another US LCC, Frontier. The airline has failed to post an annual profit since 2019.
You can access Spirit Airlines here.
Spirit pioneered the Ryanair-style business model in the US, where everything is based on a la carte pricing, and its customer communication approach was very similar initially.
The airline has had problems with the plane engines, and a large part of the fleet is grounded, and the number will increase early next year.
Spirit expects to emerge from bankruptcy in the first quarter of 2025.
Spirit Airlines Statement to Flyers:
Spirit Airlines Issues Open Letter to All Spirit Guests
DANIA BEACH, Fla., Nov. 18, 2024 /PRNewswire/ — Spirit Airlines, Inc. (“Spirit” or the “Company”) (NYSE: SAVE) today issued the following open letter to all Spirit Guests:
We are writing to let you know about a proactive step Spirit has taken to position the company for success. Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a “prearranged” chapter 11.
The most important thing to know is that you can continue to book and fly now and in the future. We also want to assure you:
You can use all tickets, credits and loyalty points as normal.
You can continue to benefit from our Free Spirit loyalty program, Saver$ Club perks and credit card terms.
Our amazing Team Members are here to offer you excellent service and an elevated experience.
We expect to complete this process in the first quarter of 2025 and emerge even better positioned to deliver the best value in the sky. Other airlines that are operating successfully today have undertaken a similar process. For more information about our financial restructuring, please visit www.SpiritGoForward.com.
We’re grateful you continue to choose Spirit for your travel needs. As we head into the holiday season and beyond, we look forward to welcoming you on board again soon.
Spirit’s Bankruptcy Filing:
Conclusion
The Chapter 11 filings in the US are business as usual (mostly) for airlines, and all the big three (American, Delta, and United) have gone through the process several times.
The airline keeps flying, and all existing tickets are honored. The non-secured debtors will take a haircut, and the existing equity holders will be completely wiped off.
It is uncertain what routes and how many frequencies the airline will operate in the medium term, so keep that in mind if you are planning to buy tickets for 2025.
