Spirit Airlines confirmed on Friday that it has filed for Chapter 11 bankruptcy protection for the second time in less than a year. The Florida-based low-cost carrier last emerged from bankruptcy in March but has continued to struggle with mounting expenses and weakening domestic demand.
CEO Dave Davis said in a statement reported by ABC News that the board determined “a court-supervised process is the best path forward to make the changes needed to ensure our long-term success.”
The airline, which reported a loss of nearly $246 million in the second quarter, said it will cut its network and shrink its fleet in a bid to save “hundreds of millions of dollars” annually. Reuters reported that Spirit’s operating costs in the latest quarter totaled $1.2 billion, exceeding its revenue by 18 percent.
Spirit said it is working with secured noteholders on possible financing structures. The carrier assured travelers on Friday that ticket sales, reservations and flight operations are still set to continue without any disruptions, including during Labor Day weekend.
The bankruptcy comes following several years of financial challenges, including a blocked merger attempt with JetBlue Airways, a failed rebranding push toward rolling out more premium seating options, and mounting pressure from rivals like Frontier Airlines, which recently expanded with new competing routes. According to CNBC, Spirit’s shares have fallen more than 70 percent over the past month and another 44 percent in extended trading on Friday. While wages and vendor obligations will continue to be met, unions have warned that further furloughs and voluntary leaves may be ahead as the airline reshapes its operations for what it calls a more sustainable future.
Get a clue Spirit leadership, just kill it now, NO amount of discount is worth the physical and mental torture of ever flying on one of your aircraft again. I always knew it was going to go bankrupt from just one flight.