A Spirit Airlines aircraft is operated in preparation for departure at Austin-Bergstrom International Airport in Austin, Texas, on February 12, 2024.
Brandon Bell | Getty Images
Spirit Airlines CEO Ted Christie said Friday that the budget airline is not considering filing for Chapter 11 bankruptcy and is “encouraged” by its plan following its failed takeover JetBlue Airways.
Spirit has struggled with changing travel demand, increasing competition in the U.S. and an engine recall from Pratt & Whitney that grounded dozens of its Airbus planes.
Earlier this year, a federal judge blocked JetBlue’s planned acquisition of Spirit on antitrust grounds, raising concerns on Wall Street about the loss-making airline’s ability to pay off its debts. Spirit said in February that it was seeking refinancing.
“We are proud to execute our plan as we exit the merger agreement with JetBlue and are encouraged by the early results of our standalone plan,” Christie said at an annual shareholder meeting on Friday. “We are not currently considering Chapter 11.”
S&P Global Ratings downgraded Spirit on Wednesday, raising questions about its ability to refinance. It noted a $1.1 billion fidelity bond due September 2025 and a $500 million convertible bond due 2026.
“Given limited cash flow generation and operating performance, as well as the public announcement of management’s decision to engage with lenders to explore options for addressing upcoming maturities, we believe it is likely that the Company will face a difficult stock market.” , it was said.
The company’s chief financial officer is leaving to become CFO at Hertz, the companies said earlier this week.
Shares of Spirit have lost more than 77% this year through Thursday’s close. The company has taken a number of measures to save and raise money, including postponing some Airbus deliveries and sale-leaseback agreements.
The airline also recently changed its business model, eliminating most change fees and bundling perks it previously sold à la carte alongside a cheap fare.
It also relaxed other policies, extending the duration of flight credits from 90 days to one year and increasing the maximum weight of checked baggage from 40 to 50 pounds.
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2024-06-07 15:55:04
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