.jpg)
Spirit Airlines has officially filed for Chapter 11 bankruptcy protection on November 19, 2024, marking the first major U.S. airline to do so in over a decade. The airline has reported losses exceeding $2.2 billion since early 2020 and has not posted an annual profit since 2019 [395500b8]. The financial strain is exacerbated by over $1 billion in upcoming debt payments, which the airline must address as it seeks to restructure its operations [395500b8].
Despite a slight increase in passenger numbers in the first half of 2024, Spirit's sales have plummeted by 20% due to a significant drop in average fares, which have decreased by 10% [6c185fb3][395500b8]. This decline in revenue has forced the airline to cut its fourth-quarter schedule by nearly 20% compared to the previous year, as it attempts to mitigate ongoing losses [1cfe76e7].
The airline's financial woes have been compounded by a failed merger with JetBlue, which was blocked by a federal judge earlier this year. This merger was seen as a potential lifeline for Spirit, providing it with the necessary resources to compete more effectively in a challenging market [395500b8].
In contrast, larger airlines like Delta and United have successfully capitalized on the recent travel boom by offering a variety of fare options, leaving no-frills carriers like Spirit struggling to adapt [395500b8]. CEO Ted Christie has previously criticized the consolidation within the airline industry, arguing that it has created an environment where profits are concentrated among a few major players, ultimately harming consumers [949807a1].
As Spirit navigates this challenging period, the focus will be on restructuring its operations and finding a path back to profitability while continuing to serve its passengers [1cfe76e7].