Spirit Airlinesthe American airline known for its Ultra-low cos modelYou, ha filed for bankruptcy again under Chapter 11 less than a year after completing its initial restructuring.
The airline faced the huge challenge of staying afloat in the wake of the COVID-19 pandemic. CBS News reported last month that plost more than $2.5 billion since the beginning of 2020 and is facing looming debt payments totaling more than 1 billion dollars over the next year.
The company assures that it will continue operations while reorganizing your Chapter 11 finances.
The maneuver, according to a report by Business Insider Africapoints to a profound restructuring These include reducing routes, layoffs and more aggressive adjustments to the operating structure.
In his previous bankruptcy Spirit managed to reduce $800 million in debt and received a cash injection of $350 million taken over by investors, which enabled business operations to continue in March.
However, The improvement was short-lived: In August, the company warned it might not stay afloat for another year. As part of the adjustment, Spirit announced a 25% capacity reduction for November.
With this in mind, the company will also cease operations in several cities: As of January 8th, flights in Milwaukee, Phoenix, Rochester (New York) and St. Louis will be suspended. Additionally, seasonal service to Bucaramanga, Colombia will be suspended effective January 13.
This retreat leaves budget travelers with a more limited perspective. By reducing its network, Spirit could weaken its competitiveness in certain markets, which could give other airlines such as Frontier, JetBlue or Southwest leeway to raise prices on routes where they previously competed more.
On the other hand, Passengers with affected reservations will receive notifications about their optionswhich include a refund. Spirit also assured that its loyalty programs such as Free Spirit and travel credit will remain active at least during the restructuring process.
The airline has made a decision regarding staff Reduce some of your staff. It is expected that there will be a lockdown 1,800 flight attendants from December. And pilot cuts are also being considered as part of the strategy to reduce operating costs.
Spirit defends that this new bankruptcy process will be “more comprehensive.” than the previous one and allows the company to be reorganized with more tools.
As stated in a note from Aviationlineassure that the declaration of bankruptcy does not entail an immediate cessation: the sale of tickets, the use of loyalty points and scheduled flights will continue to operate as normal.
Despite it, The future is not without risks. In their latest report, managers warned that their cash flows will need to improve faster than they currently expect to meet their obligations. If they do not succeed in stabilizing their situation, further adjustments could occur and the options for escaping the budget could become even narrower.
For consumers, Spirit’s second bankruptcy is a warning sign: low-cost flights could become less affordable on some routes and competition between airlines could create pressure to raise prices, particularly on routes where Spirit is retreating. In any case, the future of the well-known company is not yet written and it could reemerge with more strength in 2026.
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