- 14 Oct, 2024
After a few hours of the Wall Street Journal reporting Spirit Airlines going bankrupt, the shares of the airlines went massively down. People familiar with the matter say that even if a Chapter 11 filing is not likely, there would be difficulties if one were to occur soon because it would be unknown who would take charge.
As sighted by Reuters, https://www.reuters.com/business/aerospace-defense/spirit-airlines-talks-with-bondholders-over-terms-potential-bankruptcy-filing-2024-10-03/, and reported by the Wall Street Journal, Spirit Airlines is leading to go bankrupt and is in talks with potential creditors after a merger with JetBlue airlines failing. The airline is currently in conversation with its bondholders and has dropped its share by 30% in extended trading. With Thursday’s close in the share market, Spirit Airlines’ shares were down by 86.6%, being the lowest in the last year.
The ultra-low-cost air carrier Spirit Airlines is known for offering some of the best flights to its customers at an eye-sparkling cost.
In the wake of Wall Street reports, Ted Christie, the CEO of Spirit Airlines, said, “We are engaged in productive conversations with the advisers of our bondholders to address the upcoming debt maturities. Because those conversations are ongoing, we are not going to go into detail, take any questions on this topic, or speculate on potential outcomes.”
In the month of August, when there was an earnings call, Christe had said that “we must consider every possible avenue available to us to find incremental revenue, cost savings, and market opportunities.” He additionally, in further favor, has said that, “The chatter in the market about Spirit is notable, but we are not distracted. We are focused on refinancing our debt, improving our overall liquidity position, deploying our new reimagined product into the market, and growing our loyalty programs.” However, they are planning for non-fall and a get back in the market by refinancing.
The ones who wished to remain anonymous due to the private nature of the discussions of bankruptcy stated that the financially troubled airline is looking to its creditors for fresh funding in addition to an exchange that would prolong its existing debt. One of the individuals mentioned that there are still some details to be ironed out, such as the assets on which bondholders would be entitled to make claims and the amount of fresh funding that would be given. The people stated the company would go bankrupt if no arrangements were made.
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