US Spirit Airlines Files for Bankruptcy Protection Amid Accumulated Losses

First US Airline Bankruptcy Filing in 13 Years
Spirit Expected to Complete Restructuring Process in Q1 Next Year

Spirit Airlines, a low-cost carrier in the United States, has filed for bankruptcy protection due to deteriorating financial conditions. This is the first bankruptcy protection filing by a U.S. airline since American Airlines in 2011.

On the 18th (local time), Spirit submitted a financial restructuring plan to the U.S. Bankruptcy Court for the Southern District of New York, focusing on securing new liquidity and converting debt into equity to initiate bankruptcy protection proceedings.

Prior to filing for bankruptcy protection, Spirit reached a comprehensive financial restructuring agreement with its creditors to normalize the company. Under this agreement, creditors will provide Spirit with $350 million in new operating funds and convert $795 million of debt into equity. The company expects that if the financial restructuring plan proceeds as scheduled, it will be able to complete the reorganization process by the first quarter of next year.

Spirit explained that during the reorganization process, all flight operations, ticket sales, and reservations will continue normally.

Previously, U.S. airline JetBlue signed a deal in July 2022 to acquire Spirit for $3.8 billion, but the acquisition was blocked by the court and competition authorities, causing the deal to fall through. Since then, Spirit has been pursuing an independent financial restructuring plan.