Spirit Airlines Announces Bankruptcy and Strategic Restructuring Plan
On November 18, Spirit Airlines, Inc. officially announced a comprehensive restructuring plan as it goes through bankruptcy proceedings. The airline aims to reduce its debt on the balance sheet, ensuring long-term success as a leading low-fare carrier, while maintaining uninterrupted flights, ticket sales, reservations, and all other operations.
RUSSIAN CALIFORNIA — As part of the restructuring efforts, Spirit has entered into a restructuring support agreement backed by a supermajority of its loyalty and convertible bondholders. This agreement is set to substantially reduce the airline’s debt and enhance its financial flexibility, positioning Spirit to make necessary investments that will improve the overall travel experience for its customers.
The airline has secured commitments for a $350 million equity investment from existing bondholders and plans to convert $795 million of funded debt into equity. To implement these changes, Spirit has commenced a prearranged Chapter 11 process in the U.S. Bankruptcy Court for the Southern District of New York. This strategic move includes receiving $300 million in debtor-in-possession financing from bondholders, which, combined with the airline’s available cash reserves, aims to support operations throughout the restructuring.
During this prearranged Chapter 11 process, Spirit assures its guests that normal operations will continue. Customers can freely book flights, use their tickets, credits, and loyalty points without interruption. Importantly, wages and benefits for Spirit employees will remain unaffected, and the airline will continue paying vendors, aircraft lessors, and holders of secured aircraft indebtedness in the ordinary course without impairments.
Ted Christie, Spirit’s President and Chief Executive Officer, expressed optimism about the restructuring, stating, «I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan.» Christie emphasized that these transactions will strengthen the company’s balance sheet and empower Spirit to move forward in executing strategic initiatives aimed at transforming guest experiences and expanding travel options.
As part of the Chapter 11 process, Spirit has submitted a proposed Plan of Reorganization that incorporates the terms of the RSA and is subject to court approval. The company expects to emerge from this streamlined bankruptcy process in the first quarter of 2025.
In light of these developments, Spirit anticipates its delisting from the New York Stock Exchange in the near term, although it expects its common stock to continue trading in the over-the-counter market. The shares are likely to be canceled as part of the restructuring plan, resulting in no value for current shareholders.
For additional information regarding Spirit’s Chapter 11 case, including access to court filings and other relevant documents, stakeholders can visit SpiritGoForward.com or contact the company’s restructuring information line.
As Spirit Airlines undoubtedly navigates through this challenging period, it seeks to emerge stronger, focusing on its commitment to providing affordable travel options and exceptional value to its customers, ultimately reinforcing its position within the competitive airline industry.
