US airline Spirit Airlines has filed for bankruptcy protection after a long run of financial losses and a series of failed merger attempts.
On Monday, the Florida-based airline announced it had reached an agreement to restructure its debt and raise funds through bankruptcy proceedings expected to last until early 2025.
During this period, Spirit operations will continue as normal and passengers will not be affected, it said.
Spirit, which has not recorded a full-year profit since the start of the Covid-19 pandemic, is the first US airline to file for bankruptcy in more than a decade. American Airlines declared bankruptcy in 2011 to cut labor costs during a period of high fuel prices.
In a statement, Spirit said the bankruptcy process – known as Chapter 11 – would not impact employee compensation or payments to aircraft leasing companies.
The company will be delisted from the New York Stock Exchange in the “near term” and shares will be canceled, worthless, as part of its restructuring, Spirit said.
Despite strong demand, the no-frills airline posted losses of around $360m (£285m) in the first half of this year.
Competition in the budget travel market has intensified and Spirit has also been forced to ground its planes due to mechanical problems with some engines, driving up operating costs.
Earlier this year, Spirit's highly anticipated $3.8 billion merger with another U.S. carrier, JetBlue, fell through. A Massachusetts judge blocked the deal, arguing that a merger would reduce competition in the market.
Another merger attempt, with Frontier Airlines in 2022, failed after Spirit was outbid by JetBlue.
Originally a long-haul trucking company founded in 1964 that shifted to aviation in the early 1980s, the company was renamed Spirit in 1992. It is considered a pioneer of small-scale flights budget, forgoing many standard amenities on other airlines in order to keep ticket prices low.
