US Budget Carrier Spirit Airlines files for bankruptcy

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US low-cost carrier Spirit Airlines, struggling with financial problems, announced on Monday that it had filed for bankruptcy as part of a restructuring agreement with its creditors.

It said it had agreed with a majority of its creditors to reduce its debt through the injection of $350 million from existing bondholders.

“Spirit has received retained commitments for a $350 million equity investment from existing bondholders and will complete a deleveraging transaction to release $795 million of funded debt,” it said in a statement.

Spirit, which filed for bankruptcy under a simplified Chapter 11 process, said it planned to continue operating throughout this proceeding and that passengers can “continue to book and fly without interruption,” including using their credits and loyalty points.

Workers will continue to be paid, as will suppliers and aircraft lessors, it said.

Spirit also said it expects to be delisted from the New York Stock Exchange “in the near term,” without specifying a date.

Its shares have fallen nearly 90 percent over the past year.

The Florida-based group, which had 11 consecutive quarters of losses as of August, indicated earlier this month that it would not be able to publish its results for the third quarter of 2024.

Spirit had increased its capacity and market share in the post-Covid era, but faced increased competition from other carriers, resulting in oversupply.

A potential merger with Frontier Airlines failed in 2022 due to a competing bid from JetBlue.

Earlier this year, JetBlue and Spirit Airlines pulled the plug on their merger weeks after a federal judge ruled it violated US antitrust laws.

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