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Spirit Airlines has filed for Chapter 11 bankruptcy as part of a plan to restructure its balance sheet and strengthen its position as an affordable commercial flight carrier.
Spirit Airlines says it has secured a restructuring support agreement with a supermajority of its bondholders that includes a $350 million equity investment and $300 million in financing.
The plan aims to reduce Spirit‘s debt by $795 million and support its operations.
The airline says flights, ticket sales, customer service and reservations will proceed as usual, and employee wages and benefits will remain unaffected.
Spirit’s vendors, aircraft lessors and secured debt holders will not be affected by the bankruptcy.
The company intends to complete its reorganization by the first quarter of 2025.
Spirit’s common stock will be delisted from the New York Stock Exchange, and shares belonging to shareholders might be canceled.
The Chapter 11 bankruptcy filing comes on the heels of Spirit Airlines’ $3.8 billion merger agreement with JetBlue Airways was terminated after an antitrust lawsuit filed by the Department of Justice.
Last month, the airline furloughed hundreds of pilots to cut costs.