From CNBC: 2024-11-18 05:22:50

Spirit Airlines, known for budget air travel, files for bankruptcy protection after mounting losses, failed merger, and industry shifts. Reached deal with bondholders for $300M in financing. Expects to operate normally, exit bankruptcy in 1Q of next year. First major U.S. airline to file Chapter 11 since American Airlines 13 years ago.

Struggled with engine recall, pandemic costs, and blocked JetBlue acquisition. Lost over $335M in first half of 2024. Sold 23 Airbus aircraft to generate $519M. Expects to end year with $1B in liquidity. Plans to furlough 330 pilots in January, analysts expect more cuts in bankruptcy.

Spirit’s low-fare, fee-for-everything model was popular with bargain hunters. Became a favorite punchline for comics. Model inspired larger carriers to offer basic economy fares. Struggled post-pandemic as costs rose, international bookings surged, and fares fell. Introduced bundled fares and “first-class” options.

JetBlue’s $3.8B acquisition of Spirit blocked by judge due to fare concerns. Spirit previously had deal with Frontier. Judge said deal would harm competition. Airlines argued for better competition in U.S. market. Spirit shareholders backed JetBlue’s all-cash offer. Young wrote ruling for dedicated Spirit customers.

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