by Donald Wood
Last updated: 8:00 AM ET, Wed November 13, 2024
Spirit Airlines is reportedly working with creditors about
possible bankruptcy terms after the carrier’s continued financial struggles.
According to the Wall
Street Journal, officials from Spirit were hoping the merger with Frontier
Airlines would help restructure debt and other liabilities without a bankruptcy
filing, but the deal fell through and the airline will be forced to take
alternative measures.
The report suggests Spirit is now preparing to file for
Chapter 11 bankruptcy protections within the next few weeks. The carrier was previously
granted an extension to refinance its over $3.3 billion in debt.
To alleviate some of the debt, the airline plans
to lay off employees and sell its aircraft, which should provide over $500
million. As a result of the bankruptcy news, Spirit shares dropped around 60
percent, with stock being down 80 percent over the last year.
Earlier this week, Spirit unveiled significant
adjustments to its network, slashing dozens of domestic and international
routes to focus its resources on the most popular destinations.
The low-cost
carrier will trim 24 routes in cities across the U.S. and beyond, a move which
will impact flights to and from major hubs over the coming months.
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