Some big names in the airline industry are skeptical that struggling Spirit Airlines will be able to keep flying even as it restructures in bankruptcy. “I think the current business plan is not going to work and, if they pursue it, Chapter 11 will be a brief pit stop on the way to Chapter 7,” Scott Kirby, CEO of United Airlines, said at an event at Washington’s Dulles International Airport on Thursday. (Chapter 7 is the section of the U.S. bankruptcy code where a company shuts down and liquidates its assets.) A longtime critic of Spirit’s business model that wooed travelers with low, à-la-carte fares, Kirby echoed the skepticism expressed in some corners of the airline industry.
Spirit Airlines files for Chapter 11 bankruptcy protection
18.11.2024 - 14:25 / thepointsguy.com / Spirit Airlines / Ted Christie
Spirit Airlines, the nation's largest ultra-low-cost carrier, has filed bankruptcy protection the company announced Monday.
The Dania-Beach, Florida-based airline said it has entered into Chapter 11 bankruptcy proceedings in an effort to "position the company for long-term success."
Importantly for passengers, all of Spirit's operations will continue during the proceedings — meaning, travelers who have tickets booked on Spirit in the coming months should expect their flights to operate as planned.
"This set of transactions will materially strengthen our balance sheet and position Spirit for the future," said Ted Christie, Spirit president and CEO, in a statement announcing the news.
Monday's announcement came after months of speculation amid financial turmoil at Spirit.
The airline has faced significant financial headwinds in recent years.
On top of significant debt, the airline's fleet has been significantly affected by an engine issue affecting a wide range of airlines and aircraft worldwide — which has caused the airline to cut back on its routes in recent months.
The airline also saw a federal court block its planned merger with JetBlue — a scuttled deal that itself followed failed merger talks with budget airline competitor Frontier Airlines.
Spirit expects to exit Chapter 11 bankruptcy proceedings by the end of the first quarter of 2025, the company said Monday.
In the meantime, customers can continue to book flights on Spirit using cash or frequent flyer miles. And, the airline expects to operate as planned during the critical upcoming holiday period.
This is a developing story. Check back for updates.
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