Spirit Airlines said it had successfully made its bankruptcy on Wednesday and retracted major corporate restructuring five months later First bankruptcy filing.
The low-cost carrier first filed for Chapter 11 Bankruptcy Protection in November 2024 to “position the company for long-term success.” It followed the failure to return to profitability in the aftermath of the start of the Covid-19 pandemic.
Spirit continued its normal operations through bankruptcy proceedings, but the airline reorganized its corporate structure and financial obligations behind the scenes. As part of the restructuring, Spirit will convert $795 million in funded debt into equities, significantly reducing open debt that airlines take over the balance sheet. Spirit also received a new share increase of $350 million from existing investors, the airline said. The restructuring plan was approved by a federal judge last month.
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“Through this process, we continue to make meaningful progress in strengthening our product offerings, returning to profitability and focusing on airline positioning for long-term success,” Spirit CEO Ted Christy said in a statement announcing the restructuring. “Today, we are working on a strategy to redefine low-cost travel with new, high-value travel options.”
Last fall, Spirit’s bankruptcy filing managed a long-term ordeal of airlines struggling to find foothold, facing billions of debt, managing engine recalls, and changing business environments where airlines were at a disadvantage against mainline competitors. While US airlines have relied on premium revenue since the start of the pandemic, traditional airlines have also learned to master the concept of a “basic economy,” and have neutralised some of the competitive advantages that ultra-low-cost airlines like Spirit enjoyed before.
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The airlines have sought to stem the losses by reducing their operational footprint, changing the product structure of their fares, and introducing several layers of premium seating options.
After a federal judge blocked JetBlue’s acquisition of airlines in early 2024, bankruptcy seemed almost inevitable for many analysts and observers. Frontier Airlines has made an offer to acquire spirit In late January, we will propose another reorganization option for a problematic career. However, the spirit refused the frontier’s offer.
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