Spirit Airlines said Wednesday it formally has exited Chapter 11 bankruptcy proceedings “with significantly less debt and greater financial flexibility” after the South Florida-based carrier rejected multiple takeover bids by rival Frontier Airlines in favor of pursuing its own recovery plan.
“We’re pleased to complete our streamlined restructuring and emerge in a stronger financial position to continue our transformation and investments in the Guest experience,” Ted Christie, CEO and president, said in a statement. “Throughout this process, we’ve continued to make meaningful progress enhancing our product offerings, while also focusing on returning to profitability and positioning our airline for long-term success. Today, we’re moving forward with our strategy to redefine low-fare travel with our new, high-value travel options.”
Christie said he will continue to lead the airline with the support of its existing executive group. Spirit is headquartered in Dania Beach and remains one of the predominant carriers at Fort Lauderdale-Hollywood International Airport. The company, which hadn’t earned a net profit since before the COVID-19 pandemic, filed for Chapter 11 last December in the face of heavy debt obligations and an eroding customer base.
Spirit’s reorganization plan recently was confirmed by U.S. Bankruptcy Judge Sean H. Lane in New York “with overwhelming support from a supermajority of the Company’s loyalty and convertible noteholders.” Those creditors also kicked in a $350 million equity investment to help support the airline’s “future initiatives,” including those designed to upgrade the passenger travel experience.
Spirit continues to serve destinations throughout the U.S., Latin America and the Caribbean, although management has acknowledged its network, fleet and labor force all shrank as a result of necessary cost-cutting.
Pilot expectations
Spirit’s unionized pilots, whose ranks took a significant hit during the process with furloughs of 164 members last fall and another 194 in January, issued a statement suggesting they will hold management accountable for the future.
“While the financial restructuring process is now complete, restoring workforce confidence must be management’s immediate priority,” the group said in a statement released by the Air Line Pilots Association. “Spirit pilots are the backbone of this airline, and despite the turbulence of the recent past, we have remained dedicated to keeping this operation moving forward. As Spirit looks ahead, we expect management to focus on long-term stability — honoring our Collective Bargaining Agreement, investing in our people, and providing a clear vision for fleet and network growth.”
Pre-Chapter 11 shareholders, meanwhile, saw their stock canceled.
Newly issued shares held by the new owners “are expected to trade in the over-the-counter marketplace,” the airline said. Those shares are expected to be re-listed on a stock exchange to be identified later.