Spirit Airlines passenger aircraft. (Photo courtesy of Yonhap News)

 

[Alpha Biz= Reporter Kim Sangjin] Spirit Airlines, a major low-cost carrier in the U.S., has filed for Chapter 11 bankruptcy protection due to worsening financial conditions, the airline announced on the 18th (local time).

According to the company’s statement, Spirit submitted a financial restructuring plan to the U.S. Bankruptcy Court for the Southern District of New York, aiming to secure new liquidity and convert a portion of its debt into equity.

Prior to the filing, Spirit reached a comprehensive restructuring agreement with creditors. Under this agreement, creditors will provide $350 million in new operating funds and convert $795 million of debt into equity.

Spirit expects to exit the bankruptcy process by the first quarter of next year, assuming the restructuring plan progresses as scheduled.

During the bankruptcy proceedings, all flight operations, ticket sales, and reservations will continue as usual, the airline confirmed.

This filing comes after Spirit's merger attempt with JetBlue was blocked by regulators earlier this year, which led to a prolonged decline in revenue.

The bankruptcy filing marks the first time a major U.S. airline has sought bankruptcy protection since American Airlines in 2011.

 

 

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