Spirit Airlines filed for Chapter 11 bankruptcy protection in New York on Monday, citing financial struggles and intensified competition from larger carriers. The bankruptcy follows the collapse of its planned $3.8 billion merger with JetBlue Airways, which was blocked by a federal judge on antitrust grounds, determining it would harm budget-conscious travelers by raising ticket prices.
Spirit’s assets and liabilities are estimated between $1 billion and $10 billion respectively, and the airline has secured a restructuring support agreement with a majority of its bondholders to implement a comprehensive debt restructuring plan.
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The airline will continue operations normally during the bankruptcy process, assuring customers that flights and loyalty points remain unaffected.“The important thing to know is that you can continue to book and fly now and in the future,” the airline told passengers in a letter Monday morning.
Additionally, Spirit will receive $350 million in equity investment and $300 million in debtor-in-possession financing to aid its restructuring efforts.
Despite the bankruptcy filing, Spirit expects to keep its workforce wages and benefits intact.
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