CHICAGO — Spirit Airlines flights out of Chicago O’Hare International Airport will continue without disruption over the Thanksgiving weekend and throughout Chapter 11 bankruptcy proceedings, the discount carrier said in a statement Monday.
The nation’s largest budget carrier sought bankruptcy protection to reboot its business after a string of quarterly losses and mounting debt, stiffer competition from bigger bare-bones carriers, rising labor costs, and a failed attempt to sell the airline to JetBlue.
Spirit customers can continue to book flights and use and accumulate loyalty miles as they normally would and employees and vendors will continue to be paid, the airline said in a statement.
Spirit has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.
The airline said it received commitments for a $350 million equity investment from existing bondholders and will convert $795 million of its debt into stock in the restructured company. The bondholders will also extend a $300 million loan that, combined with Spirit’s remaining cash, will help the airline get through the restructuring.
CEO Ted Christie called the deal with bondholders “a strong vote of confidence in Spirit and our long-term plan.”
Although Spirit’s traffic grew 2 percent in the first six months of 2024 compared to the same period in 2023, travelers are paying about 10 percent less per mile, and revenue per mile from fares is down nearly 20 percent, contributing to Spirit’s red ink.
The trend is not new. The airline failed to return to profitability when the coronavirus pandemic eased and people began traveling more.
The Associated Press contributed reporting.