Spirit Airlines files for bankruptcy after failed merger talks

IT’S NOT A GOOD START OF THE WEEK FOR SPIRIT AIRLINES –

THE BIGGEST DISCOUNT AIRLINER FILED FOR CHAPTER 11 BANKRUPTCY PROTECTION MONDAY MORNING – AS IT SEEKS TO RESTRUCTURE ITS DEBTS TO BONDHOLDERS AND FIND WAYS TO SWAY TRAVELERS AWAY FROM LARGER AIRLINES.

THE MOVE COMES MONTHS AFTER A FEDERAL JUDGE BLOCKED A PROPOSED MERGER BETWEEN SPIRIT AND FELLOW BUDGET AIRLINER JETBLUE.

SINCE 2020 – SPIRIT HAS LOST MORE THAN 2 POINT 5 BILLION DOLLARS AND IS FACING DEBT PAYMENTS TOTALING MORE THAN ONE BILLION DOLLARS OVER THE NEXT YEAR.

SPIRIT SAYS IT EXPECTS TO CONTINUE OPERATING BUSINESS AS USUAL WHILE THE BANKRUPTCY PROCESS GETS UNDERWAY – THIS INCLUDES GUESTS STILL BEING ABLE TO BOOK AND FLY WITHOUT INTERRUPTION AND TEAM MEMBERS BEING PAID AND GIVEN BENEFITS.

IN A STATEMENT – SPIRIT SAYS QUOTE “THE RESTRUCTURING IS EXPECTED TO REDUCE SPIRIT’S DEBT, PROVIDE INCREASED FINANCIAL FLEXIBILITY, POSITION SPIRIT FOR LONG-TERM SUCCESS AND ACCELERATE INVESTMENTS PROVIDING GUESTS WITH ENHANCED TRAVEL EXPERIENCES AND GREATER VALUE.”

IN 20-22 – FRONTIER AIRLINES, ANOTHER BUDGET AIRLINER, TRIED MERGING WITH SPIRIT BUT WAS OUTBID BY JETBLUE. THE JUSTICE DEPARTMENT SUED — ARGUING THE 3 POINT 8 BILLION DOLLAR DEAL WOULD HURT SPIRIT CUSTOMERS LOOKING FOR LOW FARES. IN JANUARY A FEDERAL JUDGE SIDED WITH THE DOJ AND MERGER PLANS WERE DROPPED TWO MONTHS LATER.

LAST MONTH – THE WALL STREET JOURNAL REPORTED FRONTIER AND SPIRIT REVIVED MERGER TALKS – ONLY FOR FRONTIER TO DECIDE AGAINST IT – LEAVING SPIRIT WITH FEW OPTIONS.

FOR STRAIGHT ARROW NEWS, I’M CRAIG NIGRELLI.

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