The US airline, Spirit, announced on Monday that it has filed for bankruptcy protection and will work on reactivating its business, while facing the effects of the travel collapse caused by the pandemic and a failed sale attempt to JetBlue.
Spirit, the largest low-cost airline in the United States, has lost over 2.5 billion dollars since the beginning of 2020 and faces upcoming debt payments totaling over 1 billion dollars in the next year.
Spirit said that it expects to operate normally as it progresses through a pre-established Chapter 11 bankruptcy process in the United States Bankruptcy Court for the Southern District of New York, and that customers can continue booking and flying without interruptions.
Spirit's shares, based in Miramar, Florida, fell 25% on Friday, after The Wall Street Journal reported that the airline was discussing the terms of a possible bankruptcy filing with its bondholders.
It was a new blow in a series of complications that caused its shares to fall by 97% since late 2018, when Spirit was still generating profits.
Spirit's President and CEO, Ted Christie, confirmed that the airline has reached an agreement with its bondholders that is expected to reduce the company's total debt and provide greater financial flexibility.
“This set of transactions will materially strengthen our balance sheet and position Spirit for the future as we continue to execute our strategic initiatives to transform the guest experience, providing new and enhanced travel options, greater value, and increased flexibility,” Christie said in a press release.
“I am extremely proud of the hard work and dedication of the Spirit team, which are key to our sustained progress in advancing our business and satisfying our guests,” he added.