Ultra low-cost airline restructures amid its second bankruptcy in a year.
Spirit Airlines will end service in Portland after the low-cost flyer entered Chapter 11 proceedings for the second time in less than a year.
As first reported by Aviation Week, the corporate restructuring will also end service in Albuquerque, N.M.; Birmingham, Ala.; Chattanooga, Tenn.; Columbia, S.C.; Oakland, Sacramento, San Jose and San Diego, Calif.; Salt Lake City, Utah; and Boise, Idaho.
On Aug. 29, Spirit filed for Chapter 11 in Bankruptcy Court in the Southern District of New York.
“The Chapter 11 process will provide Spirit the tools, time and flexibility to continue ongoing discussions with all of its lessors, financial creditors and other parties to implement a financial and operational transformation of the Company,” reads a statement from Spirit.
CEO Dave Davis writes that amid the restructuring, the airline will continue flying its usual routes, all tickets will be honored and employees will continue to be paid.
“As we move forward, Guests can continue to rely on Spirit to provide high-value travel options and connect them with the people and places that matter most,” Davis wrote.
Within the past year, Spirit has furloughed 270 pilots and downgraded 140 captains to first officers as cost-cutting measures. This week Spirit flight attendants were warned by union leaders to “prepare for all possible scenarios.”
“We are being direct because even as we have many ways to fight because of our union, we also want to get you the truth about the situation at our airline and how each of us can take actions to protect and prepare ourselves for any challenge,” the Association of Flight Attendants said last week in a letter to its members.
With more than 5,000 flights to 88 destinations, Spirit is synonymous with low-cost service, but the airline has struggled to break away from the crowded market for leisure travel, The New York Times reports. Larger airlines have introduced their own budget offerings, while Spirit has rolled out a tiered pricing system with perks to appeal to upscale passengers.
And financial difficulties have compounded since the pandemic with rising operating costs and mounting debt. The Florida-based company had lost more than $2.5 billion by the time it filed for bankruptcy in November 2024.
Davis says the airline’s first bankruptcy filing in November was focused on reducing debt and raising capital, the Associated Press reports. Since exiting that process in March, “it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future.”
During the first bankruptcy period, two rival carriers — JetBlue and Frontier — attempted unsuccessfully to buy out Spirit.
In the second quarter this year, the airline reported a negative free cash flow of $1 billion, with $2.4 billion in long-term debt, most of it due in 2030. The airline’s parent company stated in its quarterly report it has “substantial doubt” about remaining in business for another year due to adverse market conditions.
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