Spirit Airlines files for bankruptcy, plans major debt restructuring

Spirit Airlines , Inc. (NYSE:SAVE) has filed for Chapter 11 bankruptcy protection as part of a prearranged restructuring plan aimed at reducing its debt burden and positioning the company for long-term success. 

The airline, which has long marketed itself as a low-cost carrier, announced that it has reached a Restructuring Support Agreement (RSA) with a supermajority of its loyalty and convertible bondholders. 

The agreement outlines a sweeping plan to improve Spirit’s financial flexibility and enhance its travel offerings for customers.  

In a statement, Spirit said that the restructuring would allow the company to continue operations seamlessly while implementing key financial improvements. 

Under the terms of the RSA, Spirit has secured backstopped commitments for a $350 million equity investment from its bondholders. 

Additionally, the airline will execute a deleveraging transaction that will equitize $795 million in funded debt. 

Spirit has also secured $300 million in debtor-in-possession financing from its bondholders to support its operations during the Chapter 11 process, along with its existing cash reserves and operational cash flow.  

Despite the bankruptcy filing, Spirit reassured passengers and employees that its operations would remain unaffected. 

“Guests can continue to book and fly without interruption and can use all tickets, credits, and loyalty points as normal,” the company said.