Spirit Airlines' Turbulent Descent: Second Bankruptcy Sparks Industry Ripples
Spirit Airlines filed for bankruptcy for the second time within a year after failing to stabilize financially post-reorganization. Burdened with heavy losses and operational disputes, it hopes to retain operations while restructuring. The crisis presents acquisition opportunities for competitors eyeing Spirit's assets and market presence.
Spirit Airlines has filed for bankruptcy protection for the second time within a year, the airline announced on Friday. Despite emerging from bankruptcy in March, Spirit continues to struggle with cash flow issues and substantial financial losses, prompting this latest Chapter 11 filing in New York's Southern District bankruptcy court.
The budget carrier reported a $246 million loss in the last quarter and borrowed $275 million under a credit facility to combat its cash crunch, yet could not avert another bankruptcy declaration. CEO Dave Davis indicated efforts are underway with creditors to secure potential financing needed to stabilize the airline.
The bankruptcy follows missteps in addressing Spirit's high operating expenses and conflicts with aircraft supplier AerCap Holdings. Spirit plans to scale down its fleet and reduce market presence, aiming for significant annual savings. Meanwhile, competitors like Frontier Airlines are poised to leverage Spirit's woes for market advances.
(With inputs from agencies.)
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