A Spirit Airlines aircraft undergoes operations in preparation for departure on the Austin-Bergstrom International Airport in Austin, Texas, on Feb. 12, 2024.
Brandon Bell | Getty Images
Spirit Airlines CEO Ted Christie said Friday that the budget airline is not considering a Chapter 11 bankruptcy filing and is “encouraged” by its plan after a failed takeover by JetBlue Airways.
Spirit has been fighting shifting travel demand, increased U.S. competition and a Pratt & Whitney engine recall that grounded dozens of its Airbus planes.
Earlier this yr, a federal judge blocked JetBlue’s planned takeover of Spirit on antitrust grounds, raising concerns on Wall Street concerning the money-losing airline’s ability to handle its debt. Spirit said in February it’s in search of to refinance.
“We’re proudly executing to our plan as we have exited the merger agreement with JetBlue and are encouraged by the initial results of our stand-alone plan,” Christie said at an annual shareholder meeting on Friday. “We usually are not evaluating a Chapter 11 at the moment.”
S&P Global Rankings on Wednesday downgraded Spirit, raising questions on its ability to refinance. It pointed to a $1.1 billion loyalty bond due in September 2025 and a $500 million convertible note due in 2026.
“Given the constrained money flow generation and operating performance, together with management’s public announcement of its decision to have interaction with lenders to evaluate options for addressing its upcoming maturities, we imagine it’s likely the corporate will face a distressed exchange,” it said.
The corporate’s finance chief is leaving to develop into CFO at Hertz, the businesses said earlier this week.
Spirit’s shares have lost greater than 77% this yr through Thursday’s close. The corporate has taken a bunch of steps to avoid wasting and drum up money including deferring some Airbus deliveries and sale-leaseback deals.
The airline also recently shifted its business model, ditching most flight-change fees and bundling perks that it previously sold a la carte alongside an affordable fare.
It has also softened other policies, extending the lifetime of flight credits from 90 days to a yr, and raising maximum weights of checked bags to 50 kilos from 40.
