Spirit Airlines announces restructuring plan to strengthen financial position and ensure long-term growth

Spirit Airlines has announced a strategic restructuring to strengthen its financial position and secure its future as a leading low-fare carrier. Under a comprehensive Restructuring Support Agreement (RSA) endorsed by a supermajority of the airline’s bondholders, Spirit will reduce its debt burden and enhance financial flexibility while continuing regular operations.

This prearranged Chapter 11 process, filed in the U.S. Bankruptcy Court for the Southern District of New York, includes commitments for a $350 million equity investment and $300 million in debtor-in-possession financing from existing bondholders. Spirit emphasized that flights, ticket sales, and loyalty programs remain unaffected, and all employee wages, vendor payments, and secured aircraft obligations will continue uninterrupted.

Through this plan, Spirit will convert $795 million of funded debt into equity, providing a solid foundation for long-term growth. The restructuring is designed to allow the airline to emerge from Chapter 11 by early 2025, poised to invest in enhanced travel experiences and deliver greater value to customers. CEO Ted Christie called the agreement a “strong vote of confidence” in Spirit’s future, highlighting the company’s commitment to transforming its business while maintaining its trademark affordability. Spirit has also submitted a Plan of Reorganization to the court that reflects the RSA terms and outlines a streamlined path to exit bankruptcy.

As part of the process, Spirit expects its shares to be delisted from the New York Stock Exchange and traded over-the-counter during the restructuring. Ultimately, existing shares are anticipated to be canceled with no residual value upon reorganization. Despite these challenges, Spirit reassures stakeholders of its ability to navigate the restructuring efficiently while continuing to meet the needs of passengers and partners.