A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.<\/p>\n
Kevin Carter | Getty Images News | Getty Images<\/p>\n
Spirit Airlines<\/a> on Friday filed for bankruptcy protection for the second time in a year, just months after the country’s largest budget carrier failed find to sturdy financial footing when it came out of Chapter 11 protection in March.<\/p>\n Spirit debtholders agreed in the airline’s previous bankruptcy<\/a> to exchange $795 million in debt for equity, but the carrier avoided bigger changes<\/a> to cut costs, like getting rid of planes or more dramatically shrinking its footprint.<\/p>\n Spirit now says it will reduce its network and shrink its fleet, cuts that it said will reduce costs by “hundreds of millions of dollars” a year.<\/p>\n “Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” Spirit CEO Dave Davis said in a news release on Friday.<\/p>\n Read more CNBC airline news<\/p>\n Spirit, known for its bright yellow planes, had expected to come out stronger from its previous bankruptcy, which it entered in November and emerged from in March. But the airline was dragged down by continued high costs and weaker U.S. domestic travel demand.<\/p>\n In a court filing in December, Spirit had forecast a net profit of $252 million this year. But\u00a0earlier this month<\/a>, it said it instead lost nearly $257 million since March 13, after it exited Chapter 11, through the end of June.<\/p>\n Spirit warned a few weeks ago that it might not be able to survive a year <\/a>unless it significantly increased its cash. It also said its credit card processor was seeking additional collateral. It then borrowed the entire $275 million available under its revolving credit facility and said that the card processor could hold back up to $3 million a day from the airline.<\/p>\n Spirit’s shares are down 72% over the past month.<\/p>\n The carrier had struggled for years as it dealt with a glut of U.S. flights, a Pratt & Whitney engine recall and a failed takeover by JetBlue Airways<\/a>, a deal that was blocked in court.<\/p>\n Spirit’s aircraft lessors had reached out to rival airlines in recent weeks to gauge executives’ interest in some of the carrier’s planes, according to people familiar with the matter, who spoke on the condition of anonymity because the talks were private.<\/p>\n Spirit is the United States’ largest budget airline, followed closely by rival Frontier Airlines<\/a>, which has tried and failed to merge with Spirit repeatedly since 2022. Frontier on Tuesday announced 20 new routes<\/a> that compete with Spirit to win over its struggling competitor’s customers.<\/p>\n Spirit has been an icon of budget travel and its bare-bones service \u2014 and fees for bags and everything else \u2014 became a favorite punchline<\/a> for comedians. Over the years, larger airlines like American<\/a> and United<\/a> rolled out their own basic fares for price-sensitive customers, but with more perks on board like snacks and big global networks where loyalty members could use their miles for more destinations.<\/p>\n Another challenge was that many travelers, especially post-pandemic, have sought out pricier and more spacious seats on board, as well as more international travel. Spirit has tried to rebrand to bundle fares and provide more premium seating options, though competitors have still said they have an advantage in part because they have bigger networks and more brand loyalty.<\/p>\n","protected":false},"excerpt":{"rendered":"A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1,…\n","protected":false},"author":2,"featured_media":43333,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[9178,4324,27187,448,28,122,76891,72884,72883,76892,271,34661,6145,2427,2924],"class_list":["post-119342","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-aerospace-and-defense-industry","tag-airlines","tag-american-airlines-group-inc","tag-breaking-news-business","tag-business","tag-business-news","tag-corporate-bankruptcy","tag-dave-davis","tag-frontier-group-holdings-inc","tag-jetblue-airways-corp","tag-life","tag-spirit-aviation-holdings-inc","tag-transportation","tag-travel","tag-united-airlines-holdings-inc"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/119342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=119342"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/119342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/43333"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=119342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=119342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=119342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}