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Every blogger and travel news outlet was calling for the demise of Spirit Airlines over the weekend. This did not happen. While Spirit Airlines has faced a turbulent stretch marked by two bankruptcies, deep financial troubles, and rumors that it might miss a major debt payment, it announced today that it received a rare piece of good news. It has secured an agreement with creditors that gives it access to desperately needed funding.
Spirit has obtained a $100 million lifeline (with $50 million available immediately and the remainder contingent on meeting conditions related to its ongoing reorganization or a potential strategic transaction). The airline says this infusion of cash will allow flights, ticket sales, and day-to-day operations to continue uninterrupted.
The boost comes after months of instability. Spirit re-entered Chapter 11 bankruptcy in August, just months after emerging from its previous proceedings. Since then, the airline has scaled back its network, furloughed nearly 1,800 flight attendants, and faced increasing competitive pressure. Over the weekend, some rival carriers reportedly prepared for Spirit’s possible shutdown and said that they were ready to pick up some routes if operations ceased.
Despite the challenges, Spirit recently reached tentative agreements with its pilot and flight attendant unions. With its new funding in place, Spirit emphasizes that travelers can expect business as usual with all scheduled flights and bookings proceeding normally. It appears that something else is coming, however. Spirit noted in its press release today that ” further progress on a standalone plan of reorganization or a strategic transaction. Spirit is currently in active negotiations on each of these possibilities.” What this means is anyone’s guess, but a merger or acquisition could be a “strategic transaction.”
Dave Davis, Spirit’s President and Chief Executive Officer, said:
We are grateful to our lenders for continuing to support Spirit’s transformation, recognizing all the significant progress our team has made in recent months. We continue to provide high-value travel options, which benefit American consumers whether they fly with us or not, and look forward to welcoming our Guests aboard throughout this holiday season and into the future.”
Anthony’s Take: Call it a hunch, but I knew Spirit would not be shutting down this past weekend. I’m glad to see the funding come through and hope that Spirit can continue to make moves to ensure its stability going forward.
(Image Credits: Spirit Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
