Spirit Airlines, the biggest budget Airline in the U.S., has filed for bankruptcy. Here's what you need to know if you have tickets or want to book.
What's going on with Spirit Airlines?Spirit Airlines announced on Monday, Nov. 18 the airline has filed for bankruptcy protection after what the New York Times characterizes as "a string of setbacks, most recently a failure to renegotiate its looming debt."
The company filed for Chapter 11 bankruptcy in New York. The company says it plans to come back from its setbacks caused by the pandemic and a failure to sell the airline to JetBlue.
"I am pleased 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," said Ted Christie, Spirit's president and CEO, in a statement included in the company's press release on Monday. "This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our guest experience, providing new enhanced travel options, greater value and increased flexibility. I'm extremely proud of the Spirit team's hard work and dedication, which is key to our sustained progress in advancing our business and delivering for our guests."
Spirit has reportedly lost more than $2.5 billion since the start of 2020.
The company also faces debt payments of more than $1 billion over the next year, the Associated Press reported.
"The restructuring is expected to reduce Spirit's debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing guests with enhanced travel experiences and greater value," said the company in a media release on Monday.
What do you do if you have tickets?Spirit Airlines says people can "continue to book and fly now and in the future."
The airline says people can use all tickets, credits and loyalty points "as normal" and that customers can continue to benefit from their Free Spirit loyalty program, Saver$ Club perks and credit card terms.
Spirit has entered into an agreement with its bondholders that is expected to reduce the company's total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments to provide guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a "pre-arranged" Chapter 11.
The airline said that process should be complete by the first quarter of 2025.
The airline says it plans to "emerge even better positioned to deliver the best value in the sky."
For more information about Spirit Airlines' financial restructuring visit SpiritGoForward.com.
Top stories delivered to your inbox.
