Spirit Airlines was today given court approval to exit bankruptcy – after rejecting a takeover bid from a rival.
It ends fears of significant reductions in routes and staffing for the sixth-largest carrier in the US – or even a total shutdown.
US Bankruptcy Judge Sean Lane signed off on the airline’s restructuring plan at a hearing in White Plains, New York. on Thursday.
While jobs and routes have been preserved — for now — there are casualties of the deal. All existing shares have been canceled, meaning ordinary investors lose out.
Ownership has been handed to Spirit’s lenders, which include investment funds managed by the likes of Citadel Advisors.
The plan includes raising $350 million in additional financing through new equity sales. Spirit expects to emerge from bankruptcy in early 2025.
When news broke of Spirit’s bankruptcy emerged in November, its share price plummeted 45 percent in just seconds – erasing hundreds of millions in market value from the carrier. Over the past year, it has fallen 90 percent.
Spirit recently rejected a proposed takeover by fellow budget airline Frontier, saying the proposed buyout offered less value for Spirit’s creditors than the bankruptcy restructuring.

Spirit airlines share price plunged 45 percent in aftermarket trading in November after news that it was set to file for bankruptcy was reported by the Wall Street Journal. The decline happened in seconds as investors rushed to sell the stock. It briefly recovered before falling back again. This graph shows the share price an hour after the news

Spirit Airlines is reportedly planning to file for bankruptcy following its failed merger with JetBlue
The Florida-based low-cost airline owed more than $3 billion. Spirit filed for Chapter 11, a form of bankruptcy that allowed it to keep operating while it restructured.
Even before the bankruptcy filing, last year it had scaled back growth plans, furloughed staff and inked a plan to sell 23 planes.
Spirit filed for Chapter 11, a form of bankruptcy that allows it to keep operating as it bids to cut its debts.
It was feared it could mean significant reductions in routes and staffing. If cost-cutting efforts fall short, the airline may face the prospect of a complete shutdown.
The carrier has been losing money despite strong travel demand.
A chunk of its huge $3.3billion debt is due soon – including more than $1.1billion of secured bonds that are due in less than a year.
Spirit has been struggling with losses and declining revenue since the pandemic.
In fact, while it may have made profits some quarters, it has not turned an annual profit since even before the pandemic.
Then as travelers began to once again take to the skies, many turned to larger airlines, leaving Spirit and other budget airlines struggling to get a foothold in the market.

Spirit Airlines CEO Ted Christie previously said in June that the airline was not considering filing for Chapter 11 bankruptcy, instead saying he was ‘encouraged’ by the plan it had in place after the deal with JetBlue fell through

Spirit executives saw the merger with JetBlue as a way to claw back a market share, but the Department of Justice argued that such a deal would violate anti-trust laws
Frontier Airlines and Spirit Airlines first planned to merge in 2022, then but JetBlue Airways swooped in with a higher bid. That won over Spirit’s shareholders.
Spirit executives saw the merger with JetBlue as a way to claw back a market share, but the Department of Justice argued that such a deal would violate anti-trust laws, and a judge agreed.
As a result, JetBlue pulled out of a merger agreement.
Spirit was in talks with Frontier again in October as it hoped to revive merger discussions.
Frontier´s latest offer would have allowed Spirit Airlines to retain 19 percent of the company’s equity.
But Spirit said the offer carried additional financial costs, including costs associated with a longer stay in bankruptcy, and more risks, including the risk that U.S. regulators would reject the merger of the two airlines.
Meanwhile, in December Silver Airways also filed for Chapter 11. The airline flies to vacation hotspots across Florida and the Caribbean – prompting fears for the fate of trips planned by Americans looking for winter sun.