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Spirit Airlines’ President and CEO, Ted Christie sent a message to the members of its loyalty program this morning with an update around the airline’s operations. Spirit is entering Chapter 11 bankruptcy protection in order to restructure its debts and remain in operation. Per the note, passengers should see no changes in the coming months.
Had Spirit been able to merge with JetBlue it would likely be in a different position than it is today. That did not happen and merger talks with Frontier Airlines also appear to be off the table. The company’s bondholders have now voted and received the support of a supermajority to enter into a restructuring support agreement (RSA). The RSA will improve Spirit’s debt and provide more financial flexibility for the airline.
Spirit has reassured passengers that their tickets, points, and all other aspects of traveling with the low-cost carrier will remain the same. Employees, vendors, aircraft lessors, and holders of secured aircraft indebtedness will also see business as usual.
Christie’s email message included the following:
I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan. This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our Guest experience, providing new enhanced travel options, greater value and increased flexibility. I’m extremely proud of the Spirit team’s hard work and dedication, which is key to our sustained progress in advancing our business and delivering for our Guests.
The most important thing to know is that you can continue to book and fly now and in the future. We also want to assure you that you can use all tickets, credits, and loyalty points as normal. You can continue to benefit from our Free Spirit loyalty program, Saver$ Club perks and credit card terms. Our amazing Team Members are here to offer you excellent service and an elevated experience.”
Spirit has launched a website to detail all of its plans and provide shareholders, passengers, and others interested more details.
Anthony’s Take: Spirit has had a rough few years. I’ve been impressed with how it has tried to pivot to offer more premium travel options as the market has shifted that direction. While Chapter 11 will help it get its house in order, I don’t see how it will suddenly become profitable without a merger or another airline simply acquiring it and folding it into its brand.
(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.
