Spirit Airlines Begins Bankruptcy Restructuring
Spirit Airlines has initiated a Chapter 11 bankruptcy process as part of a comprehensive restructuring strategy. This step, taken under a pre-arranged Restructuring Support Agreement (RSA), aims to reduce the airline’s $3.3 billion debt burden and bolster its financial flexibility. The plan includes converting $795 million of funded debt into equity and securing $350 million in new investments from bondholders. An additional $300 million in debtor-in-possession financing will support operations during the restructuring.
Key factors contributing to Spirit’s financial difficulties include high operating costs, stiff competition, and disruptions caused by grounded planes due to engine issues. The airline was also affected by the collapse of its planned $3.8 billion merger with JetBlue, which faced regulatory roadblocks
Despite the bankruptcy, Spirit Airlines will continue to operate normally, with flights, loyalty programs, and employee wages unaffected. The restructuring is expected to be completed by mid-2025, positioning Spirit for improved operational stability and growth,
