While it’s not over until it’s over, all signs point toward Spirit Airlines ceasing operations in the coming hours, after what can only be described as a wild ride…
For context, Spirit is in Chapter 11 bankruptcy for the second time in two years. In recent weeks, we’ve known that the airline was on the verge of liquidation. The carrier’s financial situation was bad in the first place, but was only made worse by the the increase in jet fuel prices, which caused the company to burn through its little cash at an accelerated rate.
However, it’s clear those negotiations fell apart in recent days. It appears that Spirit bondholders weren’t onboard with the plan, which is logical enough, from their perspective. That’s because a bailout would put the government ahead of other bondholders in terms of priority for the carrier’s assets. And with Spirit almost certainly continuing to lose money, there was virtually no upside to this plan for existing bondholders.
A great solo travel tip spotted this week on One Mile at a Time.
