Spirit Airlines today (November 18) has filed for Chapter 11 bankruptcy protection and reorganization following a period of financial struggles due to mounting losses and debt maturities.
The Chapter 11 filing comes after two failed merger attempts in the past two years – one recently with Frontier Airlines and other with JetBlue Airways which was not approved by the government.
The airline issued this statement:
Spirit Airlines, Inc. today issued the following open letter to all Spirit Guests:
On Nov. 18, 2024, Spirit Airlines announced that it entered into a restructuring support agreement (the “RSA”) supported by a supermajority of Spirit’s loyalty and convertible bondholders on the terms of a comprehensive balance sheet restructuring. The restructuring is expected to reduce Spirit’s debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value.
In connection with the RSA, Spirit has received backstopped commitments for a $350 million equity investment from existing bondholders and will complete a deleveraging transaction to equitize $795 million of funded debt. To implement the RSA, the Company has commenced a prearranged chapter 11 process in the United States Bankruptcy Court for the Southern District of New York (the “Court”). Existing bondholders are also providing $300 million in debtor-in-possession (“DIP”) financing, which together with Spirit’s available cash reserves and cash provided by operations, is expected to further support the Company through the chapter 11 process.
Spirit expects to continue operating its business in the normal course throughout the prearranged, streamlined chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal. The chapter 11 process itself should not impact Team Member wages or benefits, which are continuing to be paid and honored for those employed by Spirit Airlines. Vendors, aircraft lessors and holders of secured aircraft indebtedness will continue to be paid in the ordinary course and will not be impaired by the chapter 11 filing.
Spirit has engaged a claims agent, Epiq Corporate Restructuring, LLC, to provide information regarding our chapter 11 case, including court documents, claims and other information and to help answer questions from our vendors, Guests, Team Members and other stakeholders.
Also to Spirit’s customers:
We are writing to let you know about a proactive step Spirit has taken to position the company for success. Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a “prearranged” chapter 11.
The most important thing to know is that you can continue to book and fly now and in the future. We also want to assure you:
- You can use all tickets, credits and loyalty points as normal.
- You can continue to benefit from our Free Spirit loyalty program, Saver$ 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.
Additional Information
Additional information about the Company’s chapter 11 case, including access to Court filings and other documents related to the restructuring process, is available at https://dm.epiq11.com/SpiritGoForward or by calling Spirit’s restructuring information line at (888) 863-4889 (U.S. toll free) or +1 (971) 447-0326 (international). Additional information is also available at www.SpiritGoForward.com.
Spirit Airlines aircraft photo gallery:
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