Spirit Airlines in the US secures funding to exit chapter 11 bankruptcy
e funding once Spirit exits Chapter 11 proceedings, so long as it meets specific conditions, which are unknown at this time. The funding will be provided through a senior secured revolving credit facility, involving revolving credit loans and letters of credit totalling $275 million and a $25 million uncommitted incremental revolving credit facility.
The new funding will be crucial for Spirit Airlines’ financial recovery, allowing them to enhance their liquidity and optimize their business model. Despite the new commitments, Spirit will still face challenges of strict repayment conditions and a competitive market.
Spirit Airlines planes at George Bush Intercontinental Airport in Houston © Daniel Slim
Employee Layoffs
As a measure to reduce expenses, Spirit is laying off approximately 200 employees. CEO Ted Christie announced that staff reductions are necessary to decrease the airline’s size and improve its financial standing. The airline currently has an estimated 13,000 employees, including 2,000 nonunion workers, as stated in court filings related to its Chapter 11 bankruptcy case.
Spirit Airlines has stated that, “We are executing on plans to right-size our organization to align with our current fleet size and level of flying and ultimately optimize our airline. After reviewing our organizational structure, we have made the difficult decision to eliminate approximately 200 positions from various departments across the airline.”
The funding from existing debtholders and the reduction in workforce will play critical roles in Spirit Airlines’ efforts to recover from Chapter 11 bankruptcy proceedings. With a focus on financial stability and operational efficiency, Spirit aims to emerge stronger from this challenging period.
