Spirit Airlines: A New Chapter for Low-Cost Success

Spirit Airlines, a leading low-fare carrier, has announced a comprehensive agreement to deleverage its balance sheet and position the company for long-term success. This strategic move aims to strengthen Spirit's financial position and accelerate investments in enhancing the guest experience. The restructuring support agreement (RSA) is backed by a supermajority of bondholders, indicating their confidence in the airline's long-term plan.

The RSA includes a $350 million equity investment and $300 million in debtor-in-possession financing, which will reduce Spirit's debt by $795 million through equitization. This transaction will significantly improve Spirit's debt-to-equity ratio, providing enhanced financial flexibility and enabling the airline to invest in growth initiatives and better navigate market uncertainties.

Spirit Airlines' recent expansion efforts, highlighted in their 2023 Sustainability Report, demonstrate their commitment to growth and innovation. The airline has added new routes, including Milwaukee, Louisville, and St. Louis, connecting these cities to popular destinations like Florida and cities out west. Spirit's focus on environmental stewardship, social impact, and corporate governance is evident in their dedication to sustainability and community engagement.



The restructuring process will not impair vendors, aircraft lessors, and holders of secured aircraft indebtedness, ensuring that Spirit maintains positive relationships with these critical stakeholders. Spirit expects to continue operating its business in the normal course throughout the prearranged, streamlined chapter 11 process, with flights, reservations, and loyalty programs unaffected.

Spirit Airlines' emergence from the prearranged Chapter 11 process in Q1 2025 is expected to significantly impact its stock price and market position. The restructuring support agreement (RSA) will reduce the company's debt, providing increased financial flexibility and positioning Spirit for long-term success as a leading low-fare carrier. However, the delisting from the New York Stock Exchange and the cancellation of common stock may impact the stock price and liquidity, making it crucial for investors to monitor the situation closely.

In conclusion, Spirit Airlines' comprehensive agreement to deleverage its balance sheet and position the company for long-term success as a leading low-fare carrier is a strategic move that will enhance its financial flexibility and enable investments in growth initiatives. With a focus on sustainability, community engagement, and operational excellence, Spirit is well-positioned to maintain its competitive edge in the low-fare carrier market.