Spirit Airlines Furloughs Pilots and Prepares for Bankruptcy Filing in Next Few Weeks
Daniel Kim Views
Spirit Airlines is reportedly heading toward bankruptcy. Insider sources revealed on Tuesday that the airline is filing for bankruptcy protection following the collapse of merger negotiations with Frontier Airlines.
These sources indicate that Spirit is currently engaged in extensive talks with creditors to formulate a bankruptcy plan that would secure the support of the majority of its lenders. The airline is expected to file for bankruptcy within the next few weeks.
Despite strong travel demand, the low-cost carrier has continued to report financial losses.
Spirit’s ability to meet its upcoming debt obligations has been questioned, as the airline failed to turn a profit in five of the last six quarters.
In a cost-cutting move last month, Spirit announced plans to furlough approximately 330 pilots starting January 31 as part of its broader strategy to reduce expenses and improve its financial standing. As of the latest market close, Spirit Airlines’ stock price had fallen 5.29% to $3.22.
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