Spirit Airlines announced its intentions to continue flying despite filing for a “prearranged” Chapter 11 bankruptcy protection that helps them stay in business, stated a press release. The bankruptcy filing comes after the agency faced sweeping losses and immense debt, among other major issues, over the years. Nonetheless, the low-cost airline announced that it will continue to operate.
Moreover, Spirit Airlines recently “entered into a restructuring support agreement (the ‘RSA’).” Spirit’s loyalty and convertible bondholders will be supporting this restructuring to subsequently decrease debt and establish the brand for “long-term success as a leading low-fare carrier.”
Spirit Airlines files for bankruptcy protection as it restructures its debt
Despite massive losses and debt, Spirit Airlines announced its plans to continue operating even after filing for bankruptcy protection. The flying agency posted on its official Instagram page, revealing, “We’re still flying,” after news of the bankruptcy filing surfaced. The company also urged its loyal customers that there is “no need to have FOMO,” assuring it will be back on its feet in no time as it structures the heavy debt.
In addition, Spirit Airlines issued multiple press releases that it commenced the “Voluntary Prearranged Chapter 11 Proceedings.” The Florida-based agency made a restructuring agreement with bondholders to reduce debts and expand its financial flexibility to prepare for the process. The statement claimed that existing bondholders provided “backstopped commitments for a $350 million equity investment.” The company also expected to “complete a deleveraging transaction to equitize $795 million of funded debt.”
The statement noted that Spirit Airlines will receive an additional $300 million from these bankholders. This will equip the company to fund its operations through the bankruptcy process. Moreover, it looks forward to withdrawing from the deal during the first quarter of 2025.
Spirit Airlines also urged guests to “continue to book and fly without interruption” throughout its Chapter 11 bankruptcy process. Furthermore, it assured employees that the “process itself will not impact Team Member wages or benefits,” and they will continue to receive regular payments and honors.
CNN stated that Spirit filed for bankruptcy owing to years of debt, losses, and two failed mergers with Frontier Airlines and JetBlue Airways.
