Spirit Airlines Soars Towards Bankruptcy After Failed Merger With Frontier
In an exclusive report from the WSJ, well-known budget airline, Spirit, is on the verge of filing for bankruptcy protection after a failed merger attempt with another low-cost airline, Frontier.
Talks about the potential merger began in 2022 when Frontier set out to buy Spirit Airlines. However, a competitive offer from JetBlue prevented the purchase. This partnership would have resulted in the nation’s fifth largest carrier, rivaling the U.S.’s “big four” airlines. Yet, it never went through after an antitrust scrutiny that arose.
Spirit’s latest press release shared that the company filed a Form 12b-25 (a.k.a. Notification of Late Filing) after it was “unable to file its Quarterly Report,” and moreover is expected to cancel “the Company’s existing equity” if an agreement is not made with Noteholders. It’s currently the only U.S. carrier that has not filed its third-quarter results.
According to Business Traveler, it’s been five years since Spirit has turned a profit. Apparently the company experienced a $360 million loss in operating costs in the first half of this year. Combined with the company’s drastic drop in shares (almost by 90% since last year), the airline’s outlook is bleak.
Spirit Airlines’ beginnings trace back to the Michigan-born Clippert Trucking Company, that eventually branched out into aviation. For decades its provided passengers with ultra low fares, at the expense of charging for menial travel accommodations such as carry-on baggage, in-flight refreshments, seat selection and so on.
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