The bondholders who provided Spirit’s bankruptcy financing had little reason to accept a federal bailout that placed the government ahead of them in priority.
- Spirit is going to continue to lose money. They have no credible plan to stop losing money.
- The assets that are left (like gates in Fort Lauderdale, gates and slots at LaGuardia, access to Newark) would wind up being used to pay back the government, rather than the creditors.
- Those who have put money into Spirit are better off liquidating assets now, to partially recover their funds, rather than later when (1) Spirit would have lost more, and (2) they’d be lower priority in any recovery.
Citadel Americas, Cyrus Capital and Ares Management can’t agree to the terms of the government bailout. Citadel countered in a way unacceptable to the government. With no bankruptcy hearing this week, it appears that talks have failed.
Spirit previously said they would run out of cash that they could access around today. Even if there’s some runway left, it is increasingly likely that they shut down. I would not bank on flying past today, though a shutdown could come at any time.
It’s not yet clear from court filings whether the debtor-in-possession lenders have formally triggered enforcement rights or filed a notice that would start liquidation. (The most recent court notice said no such enforcement notice had been delivered.) It’s also not clear whether Spirit Airlines has funds to continue operating.
While things could change in the next few hours, it seems increasingly likely that the airline ceases operations. Enilria says a midnight shutdown tonight is rumored.
The government could not have saved NK and it was foolish for anyone to have suggested otherwise. It simply provided false hope to NK employees that need to move on no matter how much no one wants to see anyone lose their job.
High fuel costs are not going away anytime soon and there will be other casualties.
a couple more percent of industry capacity will leave to the primary benefit of DL because of the DTW overlap and B6 at FLL.
This was the likely outcome and remains the correct outcome. Administration can say “they tried” and will blame the prior administration, not the investors. Now to see who buys the assets.
It’s being reported by the WSJ so it’s not some unknown gossip website. I would expect a shut down with the last flights of tonight, maybe after tomorrow’s flights if they need to get crew back to base.
Q: Did you decide against bailing out Spirit Airlines?
TRUMP: Well, I guess we’re looking at it. If we can do it, we’d do it
Q: They’re preparing to shut down this weekend
TRUMP: Well, we’re looking at it
https://x.com/atrupar/status/2050252136613593142
If you don’t understand by now that masks are generally ineffective at mitigating contagion of the China Wuhan Lab Virus, you are an idiot. Unless you are wearing an expertly-fitted N95 or better, the exercise is pointless.
A Trump promise goes unfulfilled? What? That NEVER happens.
Oil prices will go back down. No harm, no foul. Oh, wait…
Gary, any advice on what people who have Free Spirit miles should do? Presumably, they’re about to become worthless. Redeem for anything non-Spirit-travel they can? (i.e., hotels, rental cars, merchandise)
@Andrew: An asset buyer(s) will purchase Free Spirit, airport gates, planes, etc. Most willing Spirit employees will find other aviation jobs and maintenance crews for all airlines will be happy for the certified employee influx. I will miss your lower fares…
Conversion ratio is likely 1:1, 5:4 at worst.