All you need to know about Spirit Airlines’ Bankruptcy

The biggest US budget airline, Spirit Airlines, is making headlines after it filed for Chapter 11 bankruptcy protection in November 2024. The ultra low cost carrier has reportedly faced significant financial challenges which stemmed from increasing operational costs, increased competition as well as high debt levels. 

By filing for bankruptcy protection, the airline has become the first major United States air carrier to do so since American Airlines 13 years ago. 

According to the information, the airline’s proposed merger with the US based air carrier JetBlue Airways faced regulatory hurdles which further complicated its financial stability. 

The carrier, on Monday, said that it has reached a prearranged deal with its bondholders which includes a $300 million in debtor in possession financing to assist it through the bankruptcy. The airline said that it anticipated to exit this rough period by the first quarter of next year. 

The development has shocked the travellers across the world as they are showing their concerns towards the airline increasing its charges because of the recent challenges being faced by it.

Will the flights be impacted due to the filing of Bankruptcy by Spirit?

On the other hand, the airline has emphasised its commitment towards continuing normal operations and reassured passengers that the flights will remain on schedule as planned that the customers’ loyalty programs, vouchers as well as tickets will be honoured during the restricting process. 

CEO of the airline, Ted Christie, also noted that the most significant thing to know is that travellers can continue to book and fly now and in the future without the worry of the airline going off this sector entirely. 

How Spirit Airlines aims to use the Bankruptcy?

Reportedly, the leadership of the airline strives to utilise the bankruptcy as a chance to reorganise their finances and reduce their debts in order to streamline their operations while creating a sustainable future. 

The airline will have the time and protection needed to position the company on a normal level and manage their finances so they can continue flying and bring in the required cash. 

According to the sources, the financial struggles of Spirit Airlines is being attributed to various factors which includes higher fuel prices, labour costs as well as the competitive pressures of being the low cost airline in the ever growing market of United States of America. 

Additionally, the airline industry as a whole has experienced several drawbacks after the Covid 19 pandemic because of fluctuating demand and economic uncertainties which impacted its overall profits. 

Notably, the airline is one of the leading Ultra Cost Carrier in the US, the Caribbean and Latin America and it serves to over 60 destinations, serving the passengers across these regions with affordable and convenient flight options.