Spirit Airlines files for bankruptcy

New York.- Spirit Airlines filed for bankruptcy protection on Monday, citing mounting losses, unsustainable debt, and increased competition in the low-cost airline market. Despite its financial troubles, the airline plans to continue operations, allowing passengers to book and use tickets, credits, and loyalty points as usual. Spirit expects to emerge from bankruptcy in early 2025 with reduced debt and an additional $300 million from creditors to support its restructuring.

The airline’s low-fare model, which pressured competitors to offer budget options, could face challenges if Spirit scales back operations or is acquired. Spirit’s previous merger attempts with Frontier Airlines and JetBlue Airways failed, but bankruptcy might facilitate a new acquisition or merger, potentially reducing regulatory hurdles. However, its struggles could lead to higher industry fares if competition diminishes.

Spirit’s financial woes include $3.1 billion in long-term debt and significant stock devaluation, with shares losing 93% of their value in 2024. The airline expects to be delisted from the New York Stock Exchange, with its common stock rendered worthless as part of the restructuring. Despite these challenges, Spirit remains optimistic about its ability to recover and strengthen its financial position.