Budget carrier Spirit Airlines files for bankruptcy

The airline on Monday filed for Chapter 11 bankruptcy protection while the company looked to restructure its debt. Creditors committed to provide the company with a $350 million equity investment, and an additional $300 million, to help the airline fund operations through the bankruptcy process. Spirit will continue normal flight operations during the proceedings, according to the company, and passengers can still book flights and use existing tickets and credits. The bankruptcy will not affect employee wages or benefits and the company expects to emerge from the process in early 2025, according to a statement. Spirit expects to be delisted from the New York Stock Exchange in the near term.

What contributed to the bankruptcy? Spirit last week notified the Securities and Exchange Commission that it was unable to file its third quarter earnings report due to ongoing discussions with creditors. The company’s stock value tumbled following the statement.

Spirit has attempted to merge with other low-cost carriers twice in recent years but judges have blocked those efforts. Frontier Airlines and Spirit Airlines planned to join operations in 2022 but JetBlue later outbid Frontier. A judge in January blocked the merger following an antitrust lawsuit filed by the U.S. Department of Justice.

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