Spirit Airlines has already taken large steps on this front, with the airline entering a significant transformation plan into the ongoing bankruptcy process to help revitalize the carrier. This assessment comes from Marshall Huebner, the airline’s restructuring lawyer, who shared insights during a U.S. Bankruptcy Court hearing on Tuesday. Huebner’s comments bring into light the airline’s resolve to recover from sharp fiscal losses and regain operational stability.
In an attempt to improve operational reliability and save money, the ultra-low-cost Spirit Airlines has been on a cost-cutting campaign. The airline quietly announced this week that it plans to eliminate 40 routes. This move would allow them to focus their investments in markets with the greatest potential for return. Spirit has scheduled furloughs for about one-third of its flight attendants. This lattice of connections is intentional and there isn’t much room for dallying.
In line with its restructuring through bankruptcy, Spirit Airlines has been hammering out a new contract with its pilots’ union. The airline is aiming for at least $100 million in cost savings. This change is necessary to its plan for eking its way out of bankruptcy as a smaller, more nimble, savvier competitor. The airline is in a mid-negotiation right now to rework that same operational structure. This new effort is a direct response to today’s market realities.
On top of all this, Spirit Airlines has locked down key financial backing that will help fast track its restructuring journey. The airline simultaneously entered into an agreement with debtholders to provide up to $475 million in debtor-in-possession financing. This funding is intended to provide the immediate liquidity needed while the company works through its bankruptcy proceedings and to fund operations going forward. Furthermore, Spirit has entered into an agreement with a major aircraft lessor for an additional $150 million, further strengthening its financial position.
When paired with these other strategic moves, the combined effect underscores Spirit Airlines’ willingness to double down and succeed in spurning its bankruptcy burdens. The airline’s leadership is focused on creating a sustainable business model that can withstand future economic pressures while ensuring service reliability for its customers.