Spirit Airlines Files for Bankruptcy

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Above: Spirit Airlines Airbus A320NEO aircraft spotted flying, landing and taxiing at LaGuardia airport, November 12, 2024. Image copyright: Nicolas Economou/NurPhoto via Getty Images

The Facts

  • Spirit Airlines, the largest ultra-low-cost carrier in the US, has filed for Chapter 11 bankruptcy protection in New York in a bid to restructure its billion-dollar debt.

  • The move was announced in a press release on Monday, detailing that existing bondholders committed to a $350M equity investment, as well as to provide a $300M debtor-in-progression financing to help the company through the process.

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The Spin

Narrative A

Spirit Airlines epitomizes the enduring crisis that has engulfed budget US airlines since the pandemic. Given that operational costs have never returned to pre-pandemic levels, the entire low-cost industry has been pushed to the point of unsustainability. There could be a way out, if these companies learn from models used in Europe, but this depends on passengers accepting these changes.

Newsweek

Narrative B

While it's true that Spirit and Frontier have failed to be profitable for years, several other ultra-low-cost airlines in America have posted profits. The business model isn't the problem here, but rather the fact that some carriers have decided to bundle fares and offer premium products, which there simply isn't a market for.

Skift

Metaculus Prediction