Just over a week before the holiday travel season kicks into gear, budget airline Spirit Airlines filed for bankruptcy protection.
The company known for cheap tickets with no perks offered by mainstream airlines filed for Chapter 11 bankruptcy in New York, The New York Times reported.
“Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a ‘prearranged’ chapter 11,” the company said in an open letter to customers.
The company had between 25,000 and 50,000 creditors and about $9 billion in debt at the end of September, the Times reported.
Spirit also sold several planes and laid off workers trying to cut costs, Fox Business reported.
It also assured customers they could use their tickets, credits and loyalty points as normal.
Company officials hope to clear the bankruptcy process by the 2025 first quarter.
Spirit is not the only airline to file for bankruptcy to get its structure in order. American Airlines, United Airlines and Delta Airlines had all filed for bankruptcy in the past 25 years, CNN reported.
Spirit had not had an annual profit since 2019, the newspaper reported. It had planned to merge with JetBlue Airlines, but a federal judge blocked the deal. Spirit also tried to merge with Frontier, CNN reported.
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