Spirit Airlines, a prominent low-fare carrier serving destinations across the United States, Latin America, and the Caribbean, has announced a comprehensive balance sheet restructuring under a Restructuring Support Agreement (RSA). Supported by a supermajority of its loyalty and convertible bondholders, the initiative aims to reduce $795 million in funded debt and includes a $350 million equity investment from existing bondholders. Spirit has commenced a prearranged Chapter 11 process in the U.S. Bankruptcy Court for the Southern District of New York to facilitate this transition. Additionally, bondholders are providing $300 million in debtor-in-possession financing to ensure operational stability during the restructuring. Spirit's operations, including flights, bookings, and loyalty programs, will continue without disruption, with employee wages and benefits remaining unaffected.
Spirit’s proposed Plan of Reorganization, subject to court confirmation, is expected to conclude in the first quarter of 2025. However, the company anticipates delisting from the New York Stock Exchange, with shares trading over-the-counter before being canceled as part of the restructuring. CEO Ted Christie emphasized the positive implications of the RSA, highlighting its role in enhancing financial flexibility and advancing Spirit's strategic initiatives to improve the guest experience. Known for its fuel-efficient fleet and community impact through the Spirit Charitable Foundation, Spirit remains committed to its vision of providing affordable and enhanced travel experiences.
