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Spirit Airlines assures passengers that its Chapter 11 filing will not impact their travel plans. |
Spirit Airlines, a U.S. budget carrier, has filed for bankruptcy protection after years of financial struggles and multiple failed merger efforts.
The Florida-based airline announced on Monday that it has secured an agreement to restructure its debt and raise funds during the bankruptcy process, which is expected to continue until early 2025. During this period, Spirit plans to maintain normal operations, ensuring that passengers remain unaffected.
Spirit, which has not posted a full-year profit since the onset of the COVID-19 pandemic, is the first U.S. airline to seek bankruptcy protection in over a decade. The last major airline to do so was American Airlines in 2011, which filed to reduce labor costs amid high fuel prices.
In its statement, Spirit confirmed that the Chapter 11 bankruptcy filing will not impact employee wages or payments to aircraft leasing companies. However, Spirit’s shares will soon be de-listed from the New York Stock Exchange and canceled as part of its restructuring.
Despite high travel demand, the no-frills airline reported a loss of roughly $360 million in the first half of this year. Rising competition in the budget travel market, along with engine issues that have grounded some aircraft, have driven up its operating costs.
Earlier in the year, Spirit’s proposed $3.8 billion merger with JetBlue fell through after a Massachusetts judge blocked the deal, citing potential harm to market competition. Spirit’s previous attempt to merge with Frontier Airlines in 2022 also failed, as JetBlue outbid Frontier for the acquisition.
Founded in 1964 as a long-haul trucking company and transitioning to aviation in the early 1980s, Spirit rebranded in 1992 and became a pioneer in budget air travel, focusing on minimal amenities to keep fares low.
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