Union workers warn that Spirit Airlines‘ second Chapter 11 bankruptcy would be “more difficult” than the first.
“This bankruptcy will be much more difficult than the last one and we must be prepared to act to protect our interests,” the Association of Flight Attendants said Wednesday (September 17) in a memo obtained by Reuters.
An earlier memo reported that Spirit intended to cut $100 million in annual spending on pilots in order to conserve cash, having previously announced plans to furlough an estimated 300 pilots by early November. The budget airline reportedly plans to cut its November flight capacity by 25%, claiming efforts to reduce money spent would “inevitably affect” its workforce size.
The exact number of roles set to be cut hasn’t yet been publicly determined. Spirit Airlines CEO Dave Davis said the airline would continue to evaluate the size of its fleet ahead of scheduled meetings with Spirit’s union leaders in the next few weeks, the memo stated.
Spirit, which is the United States’ largest budget carrier, has already dropped 11 cities from its route map following its decision to file for bankruptcy again in August.
The airline plans to cease operations in airports located in Albuquerque, New Mexico; Birmingham, Alabama; Boise, Idaho; Chattanooga, Tennessee; Columbia, South Carolina; Oakland, California; Portland, Oregon; Sacramento, California; Salt Lake City; San Diego; and San Jose, California, beginning on October 2, a spokesperson confirmed to airlinegeeks.com. Additionally, a previously planned route to Macon, Georgia, that was set to begin in October was also suspended.
Spirit filed for Chapter 11 bankruptcy protection for a second time on August 29, CNBC reported. The company previously agreed to exchange $795 million in debt for equity as part of its previous bankruptcy in March, however, struggled to cut costs and will now need to reduce its network and decrease its fleet, which it claims will reduce debts by “hundreds of millions of dollars” annually.
“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” Spirit CEO Dave Davis said in a news release obtained by CNBC.
Spirit listed its assets and liabilities within the range of $1 billion and $10 billion. The company shared a post on its Instagram account reassuring customers that they will still be able to book and fly on Spirit following the bankruptcy filing.
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