According to its
CEO, you won’t see Spirit Airlines in bankruptcy court anytime soon.
Despite the
initial thoughts from airline and financial pundits following a failed merger
with JetBlue Airways, Spirit CEO Ted Christie said he
has no plans to end up in Chapter 11.
Even though a
federal judge blocked the potential merger and Spirit had a recall due to failed Pratt & Whitney engines, Christie is optimistic.
"We
are proudly executing to our plan as we've exited the merger agreement with
JetBlue and are encouraged by the initial results of our stand-alone
plan," Christie said at an annual shareholder meeting on Friday. "We
are not evaluating a Chapter 11 at this time."
Still,
Spirit is struggling due to some shifting travel dynamics. The
carrier wanted to refinance its debt, but that doesn’t appear to be feasible at
this time.
S&P
Global Ratings said: "Given the constrained cash flow generation and
operating performance, along with management's public announcement of its
decision to engage with lenders to assess options for addressing its upcoming
maturities, we believe it's likely the company will face a distressed exchange."
Those
maturities over the next two years total almost $2 billion.
Spirit's
shares have lost more than 77 percent this
year. It has even tried to save cash by deferring some orders from Airbus. It
has also dropped change fees and has
lowered the cost of some other fees.
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