Spirit, an airline known for its excellent service and in-flight animal entertainment is gearing up for a bankruptcy filing, according to the Wall Street Journal.
The Florida-based airline made a name for itself by selling cheap flights at a time when the rest of the industry was raising prices. Now the rest of the industry has caught up, and the last few years has seen Spirit struggling. Saddled with debt, the airline sought a merger with Frontier Airlines in 2022. This caught the attention of JetBlue, which made a bid to acquire Spirit in the merger. However, earlier this year, a judge struck down the deal, setting the airline on the path towards bankruptcy. From WSJ:
The Florida-based budget airline is in advanced discussions with bondholders to hammer out a bankruptcy plan that would have support from a majority of creditors, as it struggles with mounting losses and looming debt maturities. Spirit is preparing a bankruptcy filing within weeks, the people said.
Spirit had also been in discussions with rival Frontier in hopes that the two carriers could revive earlier plans to join forces, likely as part of a broader restructuring in bankruptcy. Frontier decided not to move forward with such a merger at this time, the people said.
With a looming $1.1 billion in bonds set to mature, financial realities have begun to set in. In October, Spirit reached an agreement with GA Telesis, an aviation services company, to sell 23 of its planes for half a billion dollars. At the same time, the airline announced that over 300 of its pilots would be furloughed until January 2025.