The carrier will not suspend operations, but will lay off another three hundred pilots.
The American airline Spirit Airlines will be taken over by its creditors. The management of the company agreed on this with them. The seventh largest airline in the US has filed for bankruptcy protection today. This is called Chapter 11 in American law.
The carrier’s financial problems have been ongoing for a long time, and the merger with JetBlue was originally supposed to solve them. But here the court made a decision. The company decided to solve the growing debts and losses by introducing the amounts received, as follows notice to investors.
The agreement with creditors is intended to significantly restructure the company and protect it from bankruptcy by the end of the quarter next year. According to the published terms, the owners of the bonds will take control of the company. Shares disappear from the stock exchange. This year, their value fell by 94%. According to the agreement, there will be a capitalization of bonds worth $795 million. At the same time, the company announced that the work will continue and that people can continue to buy tickets.
Spirit is the seventh largest airline in the US. They operate over 200 aircraft. The company flies exclusively with Airbus A320family. This year, problems with Pratt & Whitney engines affected its operations, as a result of which the carrier had to temporarily ground part of the planes.
Spirit Airlines is the first American carrier in 13 years to file for Chapter 11 protection In 2011, American Airlines exercised this option for several months. The carrier operates in the category of ultra-low cost companies, where it offers a very cheap basic ticket price and everything else is for an additional fee. Gradually this model spread in a limited version also to classic carriers.
Spirit has not been profitable since 2019, reporting a loss of $335 million in the first half alone. Because of this, the company has already sold 23 aircraft, and plans to sell more. Already in September, he dismissed 200 pilots, another 330 will leave the company at the beginning of the year.
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2024-11-18 19:54:00
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– How will Spirit Airlines’ bankruptcy filing affect passengers with existing bookings and what compensation options are available to them?
Can you provide more information about the recent announcement made by Spirit Airlines regarding filing for bankruptcy protection? What are some of the factors contributing to this decision, and how has it impacted the company’s operations and future plans? Additionally, what are the repercussions for passengers who had already booked flights with Spirit Airlines, and what are their options for recourse or compensation?
