Spirit Airlines Files for Bankruptcy

Business|Spirit Airlines Files for Bankruptcy

Spirit Airlines, whose approach to selling cheap tickets without amenities earned it fans and detractors, filed for bankruptcy protection on Monday after a string of setbacks, most recently a failure to renegotiate its looming debt.

The airline, whose last annual profit was in 2019, has had trouble finding its footing after a federal judge blocked a planned merger with JetBlue Airways in January. Spirit has also struggled to capitalize on the recovery from the pandemic because of intense competition, engine problems that have grounded some of its planes, and other factors.

The company filed for Chapter 11 bankruptcy protection in New York. It also announced an agreement with bondholders to restructure its debts and raise money to help it operate during the bankruptcy process, which it expected to exit in the first quarter of next year.

The company published an open letter to customers noting that fliers could “use all tickets, credits and loyalty points as normal.”

Spirit began operations as a trucking company operating under a different name in 1964. It later became a tour operator and started offering flights in 1990. Two years later, it became Spirit Airlines.

But the modern incarnation of the company traces its roots to 2006, when Indigo Partners, a private equity fund that has invested in low-cost airlines worldwide, acquired a majority stake in Spirit. Under Indigo and the leadership of Ben Baldanza — who spent a decade as Spirit’s chief executive and died this month — the airline sharply focused on lowering costs and selling cheap, bare-bones tickets.