Spirit has filed for bankruptcy protection after years of financial struggles.
Transcript:
Conway Gittens: Wall Street looked to the bond market for guidance on Monday following the biggest weekly stock market rout in two months. Investors are focusing on the strength of the economy and whether that will now prompt the Federal Reserve to move slower on cutting interest rates.
In other news – Spirit Airlines has filed bankruptcy. The ultra low-cost airline struggled to compete in a marketplace where ticket prices dropped for domestic travel and more Americans flew to international destinations post-pandemic.
But there’s good news for Spirit’s frequent flyers, in an open letter posted on its website Spirit says “The most important thing to know is that you can continue to book and fly now and in the future,” adding customers “can use all tickets, credits, and loyalty points as normal.”
The question remains, however, what destinations will still be available? The company has already sold off dozens of planes in an attempt to raise cash and stay afloat. In addition, it is cutting back on the number of destinations resulting in the layoff of roughly 200 pilots in September, and another 330 planned for January.
Though a blocked acquisition by JetBlue was the last straw, Spirit has been struggling for years. It has not made a profit since 2019 and lost more than $335 million in the first half of 2024. The company’s famous – or infamous – business model of charging bargain basement fares but then charging fees for everything- like printing a boarding pass – worked until larger carriers tweaked their pricing.
Spirit expects to exit bankruptcy reorganization by the first quarter of 2025.
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