Spirit Airlines Secures $475M Lifeline Amid Bankruptcy Challenges
Spirit Airlines secured court approval on Friday for a crucial $475 million lifeline and an additional $150 million payment from aircraft lessor AerCap. This provides the struggling budget carrier with immediate access to $200 million in financing as it navigates its second bankruptcy in less than a year.
The Florida-based airline, known for its bright yellow planes and ultra-low-cost model, filed for Chapter 11 protection in August. This came after emerging from a previous bankruptcy just five months earlier in March. This time, Spirit is making deeper cuts it avoided in its first restructuring.
These include plans to:
- Reject leases on 87 aircraft
- Shrink its fleet from 214 planes to approximately 100
- Exit service in 12 cities
- Furlough about 1,800 flight attendants (one-third of cabin crew)
- Cut 270 pilots
The airline’s troubles stem from a perfect storm of challenges. These include engine recalls, a blocked JetBlue merger, rising costs, and shifting consumer preferences toward premium travel options.
Rival airlines United and Frontier have quickly announced new routes to capture Spirit’s displaced customers. Source: CNBC