After years of losses and a failed merger, the budget airline has filed for bankruptcy protection today.
In an open letter to guests today, Spirit Airlines stated: “We are writing to let you know about a proactive step Spirit has taken to position the company for success. 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.”
Spirit will continue to operate and sell flights, with customers still able to use their loyalty miles and flight credits. “The most important thing to know is that you can continue to book and fly now and in the future,” Spirit President and CEO Ted Christie said.
In a statement describing the financial terms of the chapter 11 to its investors, the airline said: “In connection with the RSA, Spirit has received backstopped commitments for a $350 million equity investment from existing bondholders and will complete a deleveraging transaction to equitize $795 million of funded debt.”
Christie said, “This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing our strategic initiatives to transform our Guest experience, providing new enhanced travel options, greater value, and increased flexibility.”
Spirit expects to exit bankruptcy in the first quarter of next year.
By CEO NA Editorial Staff
