Spirit Airlines' fate far from certain following Chapter 11 filing
CAPA - Centre for Aviation, in an article entitled: 'Spirit Airlines' Chapter 11 filing creates more questions than provides answers', stated (25-Nov-2024) Spirit Airlines' recent Chapter 11 filing was hardly surprising. The airline has not been profitable in years and debt payments were looming large. The airline has forged a pre-arranged reorganisation with bond holders and also released a turnaround plan that is arguably a business model shift away from the aggressive product unbundling that served Spirit well for many years. But none of its planned changes are new or innovative in a market dominated by larger airlines. For now, Spirit's bond holders seem willing to give the company time to execute on its plan, however the airline's fate is far from certain. [more - CAPA Analysis]
Background ✨
Spirit Airlines' Chapter 11 filing followed active discussions with bondholders to restructure its debt obligations, as the airline expected a delisting from the New York Stock Exchange1. The company received US Bankruptcy Court approval for 'first day' relief, ensuring business continuity during the Chapter 11 process2. Spirit's restructuring support agreement aimed to reduce debt and provide financial flexibility, backed by USD300 million in debtor-in-possession financing3.