Spirit Airlines’ parent company (OTCMKTS: FLYYQ) said it expects to emerge from Chapter 11 bankruptcy protection in the late spring or early summer after reaching a preliminary agreement with lenders and secured creditors to support the remainder of its restructuring.
The early-stage deal is intended to provide the financial backing needed to complete changes to the airline’s fleet, route network and cost structure.
Spirit said it is working toward becoming “a new Spirit:” a smaller carrier that continues to focus on low fares while expanding options such as premium economy and a first-class-style seating product with additional legroom.
“Spirit will emerge as a strong, leaner competitor that is positioned to profitably deliver the value American consumers expect at a price they want to pay,” CEO Dave Davis said in a statement.
The Florida-based budget airline filed for bankruptcy protection again in August, just months after exiting a prior Chapter 11 process in March.
At the time, Davis said the earlier restructuring was primarily aimed at reducing debt and raising capital. However, after emerging from that process, it “became clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” he said.
Following its second filing within a year, Spirit announced plans to suspend operations in roughly a dozen US- cities and furlough 1,800 flight attendants.
The company had also implemented furloughs and job cuts ahead of its first bankruptcy filing as it sought to address ongoing financial pressures.
Shares of Spirit Airlines Holdings added more than 36% on the news to trade at about $0.45, down almost 95% in the last year.