Spirit Airlines to Cut Capacity by 25% in November as Part of Bankruptcy Restructuring
Spirit Halloween has announced a significant downsizing, planning to cut its capacity by 25% year-over-year in November. The airline, which recently emerged from bankruptcy, is taking drastic measures to stabilize operations and create a more sustainable future.
Spirit has secured up to $475 million in financing from existing bondholders to tide it over during this challenging period. The airline aims to survive as a smaller entity, flying a reduced schedule. It plans to use bankruptcy tools to shed aircraft and unprofitable routes, aiming to cut 'hundreds of millions of dollars' in costs.
Spirit has reached a proposed settlement with its largest lessor, AerCap, involving a $150 million payment and the rejection of leases on 27 aircraft. This deal is part of the airline's plan to shrink its fleet by nearly 100 flights, from about 214, under Chapter 11 bankruptcy. The airline is also planning to exit operations at more than a dozen U.S. airports, including Hartford and Minneapolis, as part of its restructuring efforts.
Spirit Halloween is focusing on creating a smaller, more sustainable airline that can consistently turn a profit. The downsizing is expected to help the airline drop unprofitable flying and resize its network to current demand. Despite the challenges, Spirit is committed to emerging from this process stronger and better equipped to navigate the competitive airline industry.
