In November, Spirit Airlines filed for Chapter 11 bankruptcy protection. The icon of U.S. low-cost air travel has not turned a profit since 2019, and it has lost more than $2 billion since 2020.
How did it get here?
The Covid-19 pandemic has been devastating for all airlines, but it’s just the beginning of Spirit’s financial woes. The airline industry faces supply chain issues and rising costs, including higher wages for tens of thousands of employees. In addition, Spirit also faces Pratt & Whitney The engine recall has grounded dozens of planes, lower-than-expected sales and… JetBlue Airways.
Airlines executives said that after the epidemic, passenger preferences have also changed, and many consumers are willing to spend money to buy more on-board space or luxury airport lounges and other benefits. Ultra-low-cost carriers face challenges from traditional airlines such as American, delta and unitedthey introduced basic economy fares and segmented cabins to cater to more price points, from low fares to first-class tickets that can reach the mid-four figures.
Faced with mounting losses and looming debt repayments, Spirit Airlines furloughed hundreds of pilots and offered buyouts to salaried workers. It has also sold off part of its Airbus fleet and cut routes. Ultimately, the company filed for bankruptcy protection on November 18.
Spirit Airlines said it will continue normal operations during the bankruptcy and expects to exit the bankruptcy proceedings in the first quarter of 2025. .
Watch the video to learn more about the problem.
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