Spirit Airlines, the United States’ largest budget carrier, filed for Chapter 11 bankruptcy protection for the second time in a year on Friday (August 29), CNBC reports.
Spirit had 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.
“Virtually every major U.S. airline has used these tools to improve their businesses and position them for long-term success,” Spirit wrote on its Instagram account.
Spirit’s bankruptcy filing came weeks after its company was reported to have “substantial doubt” about its future, the Associated Press reported at the time. Spirit Aviation Holdings acknowledged “adverse market conditions” that it’s continued to face even after finalizing debt restructuring in March in a quarterly report shared on August 11.
The issues include a weak demand for domestic leisure travel, as well as “uncertainties in its business operations” that the company expected to continue “for at least the remainder of 2025.” Spirit’s shares were reported to have dropped more than 40%, with its stock closing at $2.10 on August 12.
The low-cost airline has struggled to recover since the COVID-19 pandemic and filed for Chapter 11 bankruptcy protection in November amid rising operation cost and massive debt, having already lost more than $2.5 billion since the beginning of 2020.
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