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US budget carrier Spirit Airlines has filed for bankruptcy protection after a long run of financial losses and a series of failed merger attempts. <\/p>\n
On Monday, the Florida-based airline said it had arranged an agreement to restructure its debt and raise money during a bankruptcy process that is expected to last until early 2025.<\/p>\n
During that time, Spirit’s operations will continue as normal and passengers will be unaffected, it said. <\/p>\n
Spirit, which has not recorded a full-year profit since the start of the Covid-19 pandemic, is the first US airline to file for bankruptcy in more than a decade. American Airlines declared bankruptcy in 2011 to cut labour costs during a period of high fuel prices.<\/p>\n<\/div>\n
In a statement, Spirit said the bankruptcy process – known as Chapter 11 – will not impact employee pay or payments to aircraft leasing companies. <\/p>\n
The company will be de-listed from the New York Stock Exchange in the “near term” and stock shares will be cancelled, with no value, as part of its restructuring, Spirit said. <\/p>\n
Despite strong demand, the no-frills airline posted losses of approximately $360m (\u00a3285m) in the first half of this year. <\/p>\n
Competition in the budget travel market has been rising and Spirit has also been forced to ground aircraft as a result of mechanical issues with some engines, which drove up operating costs. <\/p>\n
Earlier this year, Spirit’s highly anticipated $3.8bn ($3bn) merger with another US carrier, JetBlue, collapsed. A Massachusetts judge blocked the deal, arguing that a merger would reduce competition in the market. <\/p>\n
Another attempt to merge, with Frontier Airlines in 2022, fell apart after Spirit was outbid by JetBlue. <\/p>\n
Originally a long-haul trucking company founded in 1964, which pivoted to aviation in the early 1980s, the firm rebranded as Spirit in 1992. It is considered a pioneer in budget flying, forgoing many amenities that are standard on other airlines in order to keep ticket prices low.<\/p>\n<\/div>\n