US discount company Spirit Airlines has secured an additional $300 million in financing from its debtors as it emerges from Chapter 11 bankruptcy.
The troubled Miramar, Fla.-based ultra-low-cost carrier (ULCC) said in a Jan. 16 filing with the U.S. Securities and Exchange Commission that if it emerges from financial restructuring, it will receive an “exit revolving credit facility.” ” could be utilized.
Chapter 11: “The use of the proceeds by the Company shall include, inter alia, the working capital and other general corporate needs of the Company and its subsidiaries” (from Chapter 11).
This cash injection will provide a lifeline for Spirit as it recovers financially and moves forward with its new business plans. The news comes amid reports that the company has cut an additional 200 employees as it prepares to complete bankruptcy proceedings.
Spirit said in a filing that it plans to release its May-August flight schedule on Jan. 31, which will likely provide insight into its post-reorganization strategy.
Analysts say Spirit has increased its fleet too quickly in the years leading up to the COVID-19 pandemic by increasing its fleet of large Airbus narrowbody jets, leaving the market with low-cost seats to popular leisure destinations. It is pointed out that it was overflowing. Some have questioned whether the restructuring will solve Spirit's fundamental problems, such as its cost structure.
The company is pivoting with changes aimed at attracting higher-paying customers and generating new revenue streams, while moving away from its long-standing low-cost operating model.
Like other discounters, Spirit is struggling to turn a profit in the post-pandemic domestic climate. The airline has sold more than 20 A320s in recent months, postponed new aircraft deliveries, furloughed hundreds of pilots and drastically reduced passenger capacity across its network. Ta.
Spirit filed for bankruptcy in November and was delisted from the New York Stock Exchange the following month.
