Spirit Airlines announced on Monday its decision to seek bankruptcy protection as part of efforts to reestablish itself in the wake of a significant decline in travel due to the pandemic, along with a failed acquisition attempt by JetBlue.
As the largest budget airline in the United States, Spirit has incurred losses exceeding $2.5 billion since the onset of 2020. The airline is also facing impending debt obligations that surpass $1 billion over the upcoming year.
Despite this challenging situation, Spirit maintains that it will continue to operate as usual throughout the Chapter 11 bankruptcy proceedings, indicating that customers can continue their flight bookings and journeys without disruption.
Following news reports from The Wall Street Journal regarding discussions with bondholders about potential bankruptcy terms, the company’s stock plummeted 25% on Friday. This decline is the latest in a stretch of setbacks that have resulted in a staggering 97% decrease in share value since late 2018, a period when Spirit was still in a profitable position.
