Spirit Airlines files for Chapter 11 bankruptcy

The Florida-based company said in a stock market statement that it had secured a prearranged deal with bondholders, which includes $300 million in financing to keep the company running. The business, which filed for Chapter 11 protections, plans to end its bankruptcy in the first quarter of 2025, NBC News reported.

Included in the deal is a commitment of $350 million in equity investment from bondholders, which the company said equates to around $795 million of outstanding debt.

Spirit CEO and president Ted Christie said in a statement, "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 wrote in a letter to customers, "The most important thing to know is that you can continue to book and fly now and in the future." Ticket sales and other operations will continue as normal. The bankruptcy filing comes around 10 days before the Thanksgiving travel rush in the US.

The company was reportedly last profitable in 2019 and has deferred $1.1 billion in debt payments until 2025.

Following reporting from the Wall Street Journal last week that the company was preparing for bankruptcy, the company’s share price fell from $3.22 to $1.15, and closed at $1.07 on Friday.

In 2023, the company faced an engine recall and in January, a US District Court judge blocked a proposed merger with JetBlue. In October, Spirit said that in order to save $80 million, it would cut jobs and sell off 23 older planes.