Nov. 18 (UPI) — Budget carrier Spirit Airlines announced early Monday that it has filed for Chapter 11 bankruptcy, saying it expects to spend the next year going through the process.
The airline, best known for its ultra-cheap fares, subpar customer service, and failed merger attempts, became the first U.S. carrier to file for bankruptcy protection since American Airlines more than a decade ago.
Spirit has faced mounting problems starting with the COVID-19 pandemic including a surge in costs, an airplane engine recall, and its high-profile failure to merge with JetBlue Airways.
“Spirit expects to continue operating its business in the normal course throughout this prearranged, streamlined Chapter 11 process,” Spirit said in a statement. “Guests can continue to book and fly without interruption and can use all tickets, credits, and loyalty points as normal.”
Spirit also promised that the bankruptcy filing would not affect its workers, their wages or benefits, or work as usual. It also said vendors and leaseholders would continue to be paid.
Spirit’s stock entered a freefall last week after the Wall Street Journal reported that the carrier was planning on filing for bankruptcy. Shares tumbled 59% last Wednesday, dropping from $1.91 to $1.31, while its stock with the ticker symbol SAVE dropped more than 90% this year.
Spirit had said it would not report its quarterly financial result ending Sept. 30 until it has agreed with its lenders.
