Spirit Aviation Holdings, Inc., parent company of Spirit Airlines, LLC have announced that it is executing a comprehensive restructuring of the airline to position the business for long-term success. To facilitate the process, the Company has filed voluntary petitions for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York (the “Court”).

Spirit intends to use the Chapter 11 process to implement the broad changes necessary to transition the Company for a sustainable future and position it to deliver the best value in the sky for years to come. The Company has been actively engaged with certain of its largest lessors, secured noteholders and key stakeholders over the past few months as it works to refine its path forward. The Chapter 11 process will provide Spirit the tools, time and flexibility to continue ongoing discussions with all of its lessors, financial creditors and other parties to implement a financial and operational transformation of the Company. The Company is also working productively with its secured noteholders, including with respect to potential financing that may become necessary later in the proceedings.

The Company is filing customary motions with the Court to enable it to conduct business as normal during the restructuring process. Guests can continue to book, travel and use tickets, credits and loyalty points. Wages and benefits will continue to be paid and honored for those employed by the Company, including contractors. Spirit intends to pay vendors and suppliers for goods and services provided on or after the filing date in the ordinary course.

“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” said Dave Davis, President and Chief Executive Officer. “After thoroughly evaluating our options and considering recent events and the market pressures facing our industry, our Board of Directors decided that a court-supervised process is the best path forward to make the changes needed to ensure our long-term success. We have evaluated every corner of our business and are proceeding with a comprehensive approach in which we will be far more strategic about our fleet, markets and opportunities in order to best serve our Guests, Team Members and other stakeholders.”

“As we move forward, Guests can continue to rely on Spirit to provide high-value travel options and connect them with the people and places that matter most,” Davis continued. “On behalf of our Board and leadership, I want to thank our Team Members for their continued dedication, resilience and commitment to delivering a safe, reliable operation and excellent service to our Guests.”ADVERTISEMENTThrough the restructuring process, the Company expects to double down on its efforts to:

Redesign its network: Spirit will focus its flying on key markets to provide more destinations, frequencies and enhanced connectivity in its focus cities. The Company will also reduce its presence in certain markets.

Optimize its fleet size: Spirit will rightsize its fleet to match capacity with profitable demand in line with the redesigned network. This will significantly lower Spirit’s debt and lease obligations and is projected to generate hundreds of millions of dollars in annual operating savings.

Address its cost structure: Spirit will reinforce efforts to build on its industry-leading cost model by pursuing further efficiencies across the business.

Effectively compete and meet evolving consumer preferences with its three travel options – Spirit First, Premium Economy and Value: Spirit will take full advantage of its lower costs to offer consumers more of what they want – value at every price point. The airline will expand the opportunities for travelers to choose premium options while remaining true to its original mission of making travel more accessible for everyone.
Spirit expects to be delisted from the NYSE American Stock Exchange in the near term as a result of the Chapter 11 filing, and the Company expects that its common stock will continue to trade in the over-the-counter marketplace through the Chapter 11 process. The shares are expected to be cancelled and have no value as part of Spirit’s restructuring.

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Source: breakingtravelnews.com