In an exclusive report from the Wall Street Journal, well-known budget airline, Spirit, was rumored to file for bankruptcy protection after a failed merger attempt with another low-cost airline, Frontier. As of Monday, November 18th, the airline officially filed for Chapter 11 bankruptcy protection.
Despite the news, Spirit still plans to operate. In an open letter to customers, Spirit reps said, “The most important thing to know is that you can continue to book and fly now and in the future. We also want to assure you: You can use all tickets, credits and loyalty points as normal [and] you can continue to benefit from our Free Spirit loyalty program, Saver$ Club perks and credit card terms.”
The reps also assured travelers they’ll be able to proceed with their holiday travel plans. “We expect to complete this process in the first quarter of 2025 and emerge even better positioned to deliver the best value in the sky,” the statement added.
Spirit Airlines bankruptcy — how it all began
Talks about the potential merger began in 2022 when Frontier set out to buy Spirit Airlines. However, a competitive offer from JetBlue prevented the purchase. This partnership would have resulted in the nation’s fifth largest carrier, rivaling the U.S.’s “big four” airlines. Yet, it never went through after an antitrust scrutiny that arose.
Spirit’s recent press release shared that the company filed a Form 12b-25 (a.k.a. Notification of Late Filing) after it was “unable to file its Quarterly Report,” and moreover is expected to cancel “the Company’s existing equity” if an agreement is not made with Noteholders. It’s currently the only U.S. carrier that has not filed its third-quarter results.
According to Business Traveler, it’s been five years since Spirit has turned a profit. Apparently the company experienced a $360 million loss in operating costs in the first half of this year. This comes on the heels of the news of the company’s drastic drop in shares (almost by 90% since last year).
Spirit Airlines’ beginnings trace back to the Michigan-born Clippert Trucking Company, that eventually branched out into aviation. For decades its provided passengers with ultra low fares, at the expense of charging for menial travel accommodations such as carry-on baggage, in-flight refreshments, seat selection, and so on.