Distressed low-budget carrier Spirit Airlines is planning to file for Chapter 11 bankruptcy protection within weeks after a merger deal with rival Frontier Airlines collapsed and it struggles with massive debt coming due in 2025 and 2026, people familiar with the matter told Bloomberg.
Spirit raised a red flag signaling an impending bankruptcy filing when it released a statement on Nov. 12 that it could not file its 2024 third-quarter report on Securities and Exchange Commission Form 10-Q by its required deadline without unreasonable effort or expense.
The Dania Beach, Fla.-based airline said it was having discussions with holders of about $1 billion in senior secured notes due in 2025 and about $500 million of unsecured convertible senior notes due in 2026. The company said it was also exploring strategic alternatives and ways to improve its liquidity.
If Spirit reaches an agreement with its lenders, it would likely come in the form of a restructuring support agreement that would hand equity in the company to its lenders as part of a Chapter 11 bankruptcy filing, as the company indicated in its statement.