It’s anyone’s guess how this plays out, but there seems to be a belief among some senior executives at other US airlines that Spirit Airlines could shut down imminently… as soon as this weekend.
Spirit Airlines competitors think the airline will go bust
The Air Current reports that executives at multiple airlines in the United States are closely watching Spirit Airlines’ December 13 bankruptcy milestone, which they believe may trigger an abrupt shutdown of operations.
Essentially what’s going on here is that Spirit’s debtor-in-possession financing requires the company to come up with a reorganization plan or sale transaction by December 13, or else the company won’t receive the next $100 million in funding. This is a major step, and as of now, no plan has been filed.
It’s worth mentioning that even if Spirit doesn’t get the next $100 million in funding, that doesn’t necessarily mean it will shut down immediately, and it could still stick around for some number of days.
At least two airlines are reportedly preparing to make arrangements to provide a schedule to backfill canceled flights, and offer rescue fares to Spirit customers are who are stranded.
Importantly, let me emphasize that Spirit denies these allegations, with a spokesperson stating the following:
There is no truth to any rumors that we are preparing to cease operations. It is business as usual at Spirit and flights continue to operate normally. We are working closely with our debtor-in-possession providers and other key stakeholders on a wide variety of issues to support the financial needs and future of the business, as we have been throughout our restructuring process. These ongoing discussions remain productive.
Of course that’s what you’d expect a spokesperson for a company to say, until the moment comes where they do shut down.
Who knows how the Spirit Airlines situation will play out
Spirit Airlines is currently in Chapter 11 bankruptcy protection for the second time in the past year. The first filing was a complete joke, and did nothing to address the company’s mess of a business model. Instead, it just addressed debt in the short term.
With the second filing, the airline is doing what it should’ve done the first time around — it’s renegotiating labor contracts, actually trying to adjust its business model, etc. However, it definitely feels like this could be a case of “too little, too late.”
Spirit continues to lose massive amounts of money, and it seems the only potential positive outcome is an acquisition of some sort (perhaps by Frontier, which isn’t doing so great either), or just being an absolutely tiny player focused on a very small number of markets. When it comes to a potential merger, I can’t help but think that at this point, competitors might just be better off letting the airline go out of business, and then picking up the pieces.
If Spirit continues operating, one wonders if at some point in the not-too-distant future, lack of crews might become an issue. Spirit was planning on furloughing pilots in early 2026. However, the airline recently called off furloughs, because as it turns out, pilots are leaving the airline at an alarming rate, for obvious reasons. I have to imagine that if Spirit gets to a point where it has to hire pilots, it might have a bit of an issue.
Bottom line
Executives at some other US airlines seem to be anticipating an imminent Spirit Airlines shutdown, as the company reaches its next bankruptcy funding deadline, with no plan yet, and seemingly limited prospects. The airline denies these rumors, claiming it’s business as usual for the carrier.
I don’t know how this is going to play out, but I have to imagine that Spirit in its current form won’t be around much longer. What that looks like remains to be seen…
Do you think we’re going to see something imminently with Spirit?
