According to The Wall Street Journal, Spirit Airlines is in talks with bondholders over the terms of a potential Chapter 11 bankruptcy filing, following the collapse of its merger attempt with JetBlue. Although the company has been exploring ways to restructure its balance sheet through an out-of-court transaction, a bankruptcy filing now appears to be the leading option.
According to the report, a bankruptcy filing is not imminent, and the talks are still in the early stages. Spirit Airlines’ only public comment on the matter came during the company’s Q2 2024 earnings call, when CEO Ted Christie said the airline was in discussions regarding debt coming due in 2025 and 2026. At the time, he said: “Because these discussions are ongoing, we’re not going to discuss them in detail or take questions on the topic, nor are we going to speculate on potential outcomes.”
At least publicly, Spirit Airlines’ CEO has insisted that the company is not considering a Chapter 11 bankruptcy filing.
It is worth emphasizing that even if Spirit Airlines restructures under bankruptcy protection, that does not mean the airline would stop operating. On the contrary, the goal would be to continue operations while restructuring its debt and finding a viable path forward.