Spirit Airlines Files for Bankruptcy
AVIATION & AIRPORTS

Spirit Airlines Files for Bankruptcy

Spirit Airlines, whose approach to selling cheap tickets without amenities earned it fans and detractors, filed for bankruptcy protection Monday after a string of setbacks, most recently a failure to renegotiate its looming debt. The airline, whose last annual profit was in 2019, has had trouble finding its footing after a federal judge blocked a planned merger with JetBlue Airways in January. Spirit has also struggled to capitalize on the recovery from the pandemic because of intense competition, engine problems and other factors. The company filed for Chapter 11 bankruptcy protection in New York. It also announced an agreement with bondholders to restructure its debts and raise money to help it operate during the bankruptcy process, which it expected to exit in the first quarter of next year. The company published an open letter to customers noting that flyers could "use all tickets, credits and loyalty points as normal." Ted Christie, Spirit's CEO, said in a statement that the arrangements announced Monday represented "a strong vote of confidence in Spirit and our long-term plan." The airline said in a court filing that it had 25,000 to 50,000 creditors, and total debt of about $9 billion at end of September. It said its shares, which plunged as its problems became more acute, would be delisted from the New York Stock Exchange. Spirit began operations as a trucking company operating under a different name in 1964. It later became a tour operator and started offering flights in 1990. Two years later, it became Spirit Airlines. But the modern incarnation of the company traces its roots to 2006, when Indigo Partners, a private equity fund, acquired a majority stake in Spirit. Under Indigo and the leadership of Ben Baldanza -- who spent a decade as Spirit's CEO and died this month -- the airline sharply focused on lowering costs and selling cheap, bare-bones tickets. Spirit's business model made the airline the butt of late-night jokes, but also helped to reshape the industry. Travelers flocked to Spirit for its low fares, often overlooking concerns about the quality of its service. The airline earned consistent profits and other companies sought to emulate its approach. Today, most U.S. airlines offer some version of a no-frills ticket.Spirit also became a powerful force in the industry. The airline's presence in a city would often pressure others to lower fares. That phenomenon became a central part of the Justice Department's successful lawsuit to prevent the JetBlue-Spirit merger, on the grounds that losing Spirit would harm consumers. A round-trip flight on Spirit cost $140 on average, not including taxes, fees and add-ons, according to Cirium, an aviation data firm. That's slightly higher than the $136 for Frontier Airlines and $134 for Allegiant Air, both rival budget carriers. The bankruptcy filing comes after Spirit had spent months trying to renegotiate its debts. Companies, including many airlines, often emerge from Chapter 11 bankruptcy cases on stronger financial footing. Airlines have filed for Chapter 11 more than 180 times in recent decades, according to data from Airlines for America, a trade group. Three of the industry's largest companies -- American Airlines, Delta Air Lines and United Airlines -- filed bankruptcy cases after the Sept. 11 terrorist attacks.Those big airlines have profited from the pandemic recovery, in part by taking advantage of demand for premium and international travel. But Spirit and other budget airlines have had a more challenging time with rising costs and increased competition in large part because they did not fly to distant destinations or offer premium services like business class.

"Join industry leaders at RAHSTA Expo, India's premier platform for roads, highways and traffic infrastructure. Register now to explore innovations, network with experts and shape the future of mobility."

Spirit Airlines, whose approach to selling cheap tickets without amenities earned it fans and detractors, filed for bankruptcy protection Monday after a string of setbacks, most recently a failure to renegotiate its looming debt. The airline, whose last annual profit was in 2019, has had trouble finding its footing after a federal judge blocked a planned merger with JetBlue Airways in January. Spirit has also struggled to capitalize on the recovery from the pandemic because of intense competition, engine problems and other factors. The company filed for Chapter 11 bankruptcy protection in New York. It also announced an agreement with bondholders to restructure its debts and raise money to help it operate during the bankruptcy process, which it expected to exit in the first quarter of next year. The company published an open letter to customers noting that flyers could use all tickets, credits and loyalty points as normal. Ted Christie, Spirit's CEO, said in a statement that the arrangements announced Monday represented a strong vote of confidence in Spirit and our long-term plan. The airline said in a court filing that it had 25,000 to 50,000 creditors, and total debt of about $9 billion at end of September. It said its shares, which plunged as its problems became more acute, would be delisted from the New York Stock Exchange. Spirit began operations as a trucking company operating under a different name in 1964. It later became a tour operator and started offering flights in 1990. Two years later, it became Spirit Airlines. But the modern incarnation of the company traces its roots to 2006, when Indigo Partners, a private equity fund, acquired a majority stake in Spirit. Under Indigo and the leadership of Ben Baldanza -- who spent a decade as Spirit's CEO and died this month -- the airline sharply focused on lowering costs and selling cheap, bare-bones tickets. Spirit's business model made the airline the butt of late-night jokes, but also helped to reshape the industry. Travelers flocked to Spirit for its low fares, often overlooking concerns about the quality of its service. The airline earned consistent profits and other companies sought to emulate its approach. Today, most U.S. airlines offer some version of a no-frills ticket.Spirit also became a powerful force in the industry. The airline's presence in a city would often pressure others to lower fares. That phenomenon became a central part of the Justice Department's successful lawsuit to prevent the JetBlue-Spirit merger, on the grounds that losing Spirit would harm consumers. A round-trip flight on Spirit cost $140 on average, not including taxes, fees and add-ons, according to Cirium, an aviation data firm. That's slightly higher than the $136 for Frontier Airlines and $134 for Allegiant Air, both rival budget carriers. The bankruptcy filing comes after Spirit had spent months trying to renegotiate its debts. Companies, including many airlines, often emerge from Chapter 11 bankruptcy cases on stronger financial footing. Airlines have filed for Chapter 11 more than 180 times in recent decades, according to data from Airlines for America, a trade group. Three of the industry's largest companies -- American Airlines, Delta Air Lines and United Airlines -- filed bankruptcy cases after the Sept. 11 terrorist attacks.Those big airlines have profited from the pandemic recovery, in part by taking advantage of demand for premium and international travel. But Spirit and other budget airlines have had a more challenging time with rising costs and increased competition in large part because they did not fly to distant destinations or offer premium services like business class.

Next Story
Infrastructure Urban

PRS International marks 18 years of global advisory work

PRS International Group of Companies recently said it has strengthened its position as a sovereign-grade multinational advisory organisation, marking nearly 18 years of operations across strategic communications, institutional advisory and international cooperation. The Group, with headquarters in Washington, D.C. and New Delhi, said its work spans more than 190 countries and supports governments, multilateral institutions, investors, corporations and private clients. The organisation said its services cover government advisory, crisis management, trade and investment facilitation, nation bra..

Next Story
Infrastructure Urban

dormakaba showcases access solutions at iDAC Chandigarh

dormakaba recently participated in iDAC Chandigarh 2026 at JW Marriott, engaging with architects, interior designers, developers, hospitality professionals and industry experts. The access solutions brand showcased a range of security and architectural products, including Mechanical Key Systems, Digital Cylinder, C Lever, Lever Handle, AIDO’s SLYNK Profiled Door System and Hotel Lock. The company said AIDO’s solutions added a design-led architectural and hospitality dimension to its presence at the event. The SLYNK Profiled Door System drew attention for supporting modern interiors where ..

Next Story
Infrastructure Energy

Tata Power Secures Karnataka Transmission Project

Tata Power has won a power transmission project in Karnataka after emerging as the successful bidder in a tariff-based competitive bidding process run by PFC Consulting, a wholly owned subsidiary of Power Finance Corporation. The company received a Letter of Intent from PFC Consulting for a renewable energy evacuation scheme to be delivered under a Build, Own, Operate and Transfer model. The award follows a competitive selection and positions the firm to expand its transmission activities in the state. As part of the contract, Tata Power will acquire the special purpose vehicle (SPV) created f..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement