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Spirit Airlines has filed for bankruptcy protection for the second time in less than a year, underscoring the company's continued financial
The ultra-low-cost carrier said deeper restructuring measures are now unavoidable.
Spirit's return to bankruptcy court reflects ongoing challenges tied to high operating costs, soft domestic travel demand, and a failed merger with JetBlue Airways Corporation (NASDAQ:JBLU), CNBC reports.
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Spirit Airlines has filed for bankruptcy and plans to shrink its fleet and route network to cut operating costs by hundreds of millions annually.
A previous debt-for-equity swap failed to realign its business model, CEO Dave Davis said. The airline swung from projecting a $252 million profit in 2024 to posting a $257 million loss by June. Last month, executives warned it could not survive another year without new cash. Spirit has already maxed out its $275 million credit facility, while credit card processors demand more collateral.
Labor unions cautioned crews about furloughs and extended leaves. Hundreds of flight attendants are already on voluntary leave, with deeper cuts expected. The Association of Flight Attendants-CWA said this restructuring "will be harder and look different than last year" but pledged to keep workers informed.
Spirit's retreat is opening doors for rivals. Frontier Airlines has added 20 routes into Spirit's core markets, while American Airlines Group Inc. (NASDAQ:AAL) and United Airlines Holdings Inc. (NASDAQ:UAL) continue expanding basic economy offerings atop stronger networks and loyalty programs.
Despite the turbulence, Spirit said flights and bookings will continue during restructuring as it negotiates with lessors and creditors on its turnaround plan.
Price Action: SPR shares are trading lower by 1.39% to $41.01 premarket at last check on Tuesday.
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