Spirit Airlines Files For Bankruptcy
Date
11/19/2024 12:40:08 AM
(MENAFN- Baystreet)
U.S. discount carrier Spirit airlines (SAVE) has filed for bankruptcy protection from its creditors after years of mounting losses.
The airline said it hopes to exit creditor protection in the first quarter of 2025 and plans to
continue operating normally during the busy year-end holiday season.
Spirit is the first major U.S. airline to file for Chapter 11 bankruptcy protection since American Airlines did so in 2011.
Florida-based Spirit Airlines has struggled with an engine recall that grounded its aircraft, a surge in costs after the pandemic, and a failed Acquisition by rival JetBlue Airways (JBLU).
A federal U.S. judge earlier this year blocked Spirit's purchase by JetBlue on antitrust grounds and competition concerns.
Spirit has struggled with more than $1 billion U.S. of debt, much of which was taken on during the Covid-19 pandemic when its aircraft were grounded.
The airline hasn't had a profit since 2019, the year before Covid-19 struck, and lost more than $335 million U.S. in the first half of this year.
The carrier said it has reached a deal with bondholders for $350 million U.S. in equity, which will enable it to continue operating while it restructures its debt.
Spirit filed for bankruptcy protection in the Southern District Court of New York.
The company's stock will be delisted from the New York Stock Exchange because of the bankruptcy filing.
The stock of Spirit Airlines has declined 93% this year and currently trades for $1.08 U.S. per share.
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