Spirit Airlines files for bankruptcy protection amid growing losses and debt

After struggling with losses, mounting debt, and a botched merger during the post-pandemic travel slowdown, Spirit Airlines announced Monday that it has filed for Chapter 11 bankruptcy protection.

With plans to complete its bankruptcy in the first quarter of 2025, the company announced in a stock market statement that it has reached an agreement with bondholders that includes $300 million in finance to keep it afloat.

Ten days before record numbers of travelers are scheduled to take to the skies over Thanksgiving, the firm said in a statement that ticket sales and all other activities will continue as usual.

In a statement, Spirit CEO and President Ted Christie said, “I am happy that we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan.”

“The most important thing to know is that you can continue to book and fly now and in the future,” he wrote in a message to clients.

Spirit, which is headquartered in Dania Beach, Florida, has already postponed paying off $1.1 billion in debt until the next year. 2019 was the final year it turned a profit.

Bondholders have committed to investing $350 million in stock as part of the agreement, which it said is equivalent to $795 million in outstanding debt.

After The Wall Street Journal revealed that the company was getting ready to file for bankruptcy protection, its share price dropped from $3.22 to $1.15 last week, ending at $1.07 on Friday.

With an engine recall last year and a U.S. district judge barring a proposed $3.8 billion merger with JetBlue in January, the company has had a turbulent few years. In an effort to save $80 million, Spirit said last month that it will sell 23 outdated aircraft and lay off employees.

At the time, industry commentators stated that Spirit had little choice but to deal with a potential restructuring and bankruptcy as a result of the court’s ruling.