A Spirit Airways plane undergoes operations in preparation for departure on the Austin-Bergstrom Worldwide Airport in Austin, Texas, on Feb. 12, 2024.
Brandon Bell | Getty Pictures
Spirit Airlines CEO Ted Christie stated Friday that the price range airline is not contemplating a Chapter 11 chapter submitting and is “inspired” by its plan after a failed takeover by JetBlue Airways.
Spirit has been battling shifting journey demand, elevated U.S. competitors and a Pratt & Whitney engine recall that grounded dozens of its Airbus planes.
Earlier this yr, a federal decide blocked JetBlue’s deliberate takeover of Spirit on antitrust grounds, elevating issues on Wall Road in regards to the money-losing airline’s potential to handle its debt. Spirit stated in February it’s searching for to refinance.
“We’re proudly executing to our plan as we have exited the merger settlement with JetBlue and are inspired by the preliminary outcomes of our stand-alone plan,” Christie stated at an annual shareholder assembly on Friday. “We aren’t evaluating a Chapter 11 right now.”
S&P World Rankings on Wednesday downgraded Spirit, elevating questions on its potential to refinance. It pointed to a $1.1 billion loyalty bond due in September 2025 and a $500 million convertible notice due in 2026.
“Given the constrained money circulation era and working efficiency, together with administration’s public announcement of its resolution to have interaction with lenders to evaluate choices for addressing its upcoming maturities, we consider it is seemingly the corporate will face a distressed change,” it stated.
The corporate’s finance chief is leaving to grow to be CFO at Hertz, the businesses stated earlier this week.
Spirit’s shares have misplaced greater than 77% this yr by means of Thursday’s shut. The corporate has taken a bunch of steps to save lots of and drum up money together with deferring some Airbus deliveries and sale-leaseback offers.
The airline additionally lately shifted its enterprise mannequin, ditching most flight-change charges and bundling perks that it beforehand bought a la carte alongside an inexpensive fare.
It has additionally softened different insurance policies, extending the lifetime of flight credit from 90 days to a yr, and elevating most weights of checked baggage to 50 kilos from 40.