Spirit Airlines to exit Chapter 11 in coming weeks
February 24, 2025
Spirit Airlines expects to remerge from its three-month Chapter 11 reorganisation proceedings in the coming weeks, the airline has disclosed, with its reorganisation plan confirmed by the United States Bankruptcy Court for the Southern District of New York.
Spirit’s president and CEO Ted Christie described the approval as “a major milestone,” expressing his confidence that Spirit is now well-positioned for future success. “Throughout this process, we’ve had virtually unanimous support from our bondholders, who recognise Spirit’s value and potential,” he added. “As we move forward, our leadership team remains focused on reducing costs while also advancing our strategic initiatives to transform our guest experience”.
Under the approved restructuring plan, Spirit will equitize $795 of funded debt, receive $350 million of new equity investment and issue a $480 million aggregate principal amount of new senior secured debt to existing bondholders upon emergence. Additionally, it will enter into a new revolving credit facility of up to $300 million.
The US low-cost carrier first filed for Chapter 11 bankruptcy protection on 18 November 2024, being the first US airline to do so since American Airlines’ Chapter 11 filing in 2011. Having failed to record a full-year profit since the Covid-19 pandemic, Spirit had been facing mounting losses; noting losses of around $360 million in the first half of 2024.
Two unsuccessful merger attempts (the first with Frontier Airlines and the second with JetBlue Airways) also failed to turn the Florida-based carrier’s fortunes around. In November 2024, Christie stated that the restructuring process would “materially strengthen [the airline’s] balance sheet and position Spirit for the future while [it continues executing on strategic initiatives to transform [its] guest experience”. The upcoming successful culmination of restructuring proceedings also allays Spirit’s previous concern, outlined in a November SEC filing, that it may not be able to “continue as a going concern”.
