Spirit Airlines Files for the bankruptcy of Chapter 11

Friday, Spirit Airlines filed a bankruptcy for the second time in a year, only a few months after the country’s largest budget carrier failed to find a robust financial foot when he left the protection of chapter 11 in March.

Spirit Debtholders agreed with the previous bankruptcy of the airline to exchange $ 795 million in debt for equity, but the carrier has avoided greater changes to reduce costs, like getting rid of planes or more radically reduce its footprint.

Spirit now says that he will reduce his network and reduce his fleet, the cuts which, according to him, will reduce the costs of “hundreds of millions of dollars” per year.

“Since the release of our previous restructuring, which was targeted exclusively on the reduction of the financed debt of Spirit and the rise in equity, it has become clear that there is much more work to do and many other tools are available for the best position for the future,” said Spirit Davis CEO in a press release on Friday.

In his file, Spirit has listed its assets and liabilities between $ 1 and $ 10 billion.

The carrier sought to reassure customers they can continue to book and fly on Spirit after his bankruptcy deposit.

“Practically all the major American airlines have used these tools to improve their companies and position them for long -term success,” Spirit on Friday published on his Instagram account, written in white on a black background, unnecessary for the carrier who often presents his shiny yellow aircraft and tropical beaches.

Spirit, known for his bright yellow planes, expected to get out of his previous bankruptcy, which he entered in November and emerged in March. But the airline was brought by high costs and high costs and lower American domestic demand.

In a legal file in December, Spirit had planned a net profit of $ 252 million this year. But earlier this month, he said that he had rather lost almost $ 257 million since March 13, after leaving Chapter 11 in late June.

Spirit warned a few weeks ago that he may not be able to survive a year unless he significantly increases his money. He also said that his credit card processor was looking for additional guarantees. He then borrowed the full 275 million dollars available under his renewable credit facility and said that the card processor could retain up to $ 3 million per day of the airline.

Spirit shares are down 72% in the last month and 45% drop in trade after working hours on Friday.

Unions have warned pilots and on-board agents earlier this month that more changes could be in advance. Hundreds of on -board agents are already on voluntary leave, and Spirit has planned to compete hundreds of drivers this year to reduce costs.

“This bankruptcy will be more difficult and will be different from that of last year, but we will keep you closely informed and stay together as we advance,” said the association of carriers on Friday.

He said he expects more vacation to be offered. “As we communicated a few weeks ago, we urge you to take a honest look at your personal situation, examine all your options and prepare all possible scenarios,” said the union.

Spirit had trouble for years because he treated a superabundant JetBlue AirwaysAn agreement that was blocked in court.

Spirit’s plane donors had contacted competing with airlines in recent weeks to assess the leaders’ interest in certain carrier planes, according to people familiar with the issue, which spoke under the cover of anonymity because the talks were deprived. Spirit said on Friday that he was “actively committed” with his biggest donors, debtors and others to “refine his way to follow”.

The carrier is the largest airline in the United States budget, followed closely by its rival Airlines Frontierwho has tried and failed to merge with Spirit several times since 2022.

Frontier announced on Tuesday 20 new routes that compete with Spirit to win customers from his competitors in difficulty.

Spirit was a budget travel icon and its naked service – and costs for bags and everything else – has become a favorite punchline for actors.

Over the years, larger airlines like American And United Deprived their own basic prices for customers sensitive to prices, but with more advantages on board such as snacks and large global networks where members of loyalty could use their miles for more destinations.

Another challenge was that many travelers, especially after Pandemic, looked for more expensive and more spacious seats on board, as well as more international trips. Spirit has tried to rename to group the prices and offer higher -end seats options, although competitors have always said that they had an advantage in part because they have larger networks and more loyalty to the brand.