In Wake Of Frontier Merger Failure, Spirit Mulls Bankruptcy
All options are on the table for embattled low-cost airline.
Credit: Wikimedia
Among multiple news outlets, Reuters reported yesterday (Nov. 12) that Spirit Airlines said it is discussing “strategic alternatives to improve liquidity” including preparing to file for bankruptcy. The airline is considering its options following the breakdown of merger talks with Frontier Airlines, according to a Wall Street Journal report cited by Reuters.
Spirit stock is down close to 80% this year in contrast to a 52% increase for the Standard & Poor passenger airline index. Despite strong travel demand, Reuter wrote, Spirit has failed to report a profit in five of the last six financial quarters. In October, the airline announced it would furlough 330 pilots at year-end to cut costs.
In addition, Reuters reports Spirit is selling 23 older Airbus aircraft for $519 million to provide an estimated $225 million in liquidity next year. The company announced it was adjusting its operating margin for the third quarter downward by 12% compared with last year.
