Spirit Airlines will run out of cash next week. That’s what they told their bankruptcy judge at a hearing on Thursday.
- There’s money in restricted accounts for payroll and taxes
- And there’s $240 million restricted by creditors
- What’s left after that could run out within the week
The airline’s position is that they’re on the verge of being rescued by the federal government with a bailout. Any bailout would rest on questionable legal authority, which should concern the judge. Spirit’s business has failed which is why – even after much triage and shrinking in bankruptcy – they’re still bleeding cash.
Spirit Airlines wants access to the restricted cash from creditors to continue operating until a government bailout comes through.
The cash actually available to Spirit to fund ongoing operations is not going to last for very much longer..So either new financing, either or both of new financing or access to almost $240 million of restricted cash, is absolutely essential. Round about, no later than the end of next week.
The company blames their situation on high fuel prices and the conflict with Iran. That is not credible. Their problems long predate this, and they haven’t had a credible path to actually making money. And if their solvency is contingent on lower jet fuel prices then there’s a good chance they’ll just burn through taxpayer cash anyway.
Still, they say that government funding will “create an appropriately capitalized, fierce competitor in the airline space” and position them for a merger with another “value carrier.”
With the government dangling $500 million, I’d expect them to be permitted to access a portion of cash they’re holding. But Spirit’s own position is that they will burn through it, with little narrative about how they actually begin making money. At this point liquidation might be far better for creditors – selling their Fort Lauderdale franchise and New York LaGuardia gates and slots – than continued operations.
Workers want the taxpayer injection. Both flight attendants union leader Sara Nelson and pilot union ALPA have endorsed a bailout. But might just buy them time to keep getting paid while looking for another job.
Why doesn’t Spirit just re-brand itself as an AI company, like Allbirds just did, then pump n’ dump the stock. It’s not like the SEC or anyone is gonna actually enforce laws or ethics anyway. Might at least get them a better lifeline than relying on this administration…
Are people still booking flights on Spirit? I wouldn’t because I don’t know what would happen to my ticket if they cease operations.
@Raphael Solomon — Saw one of their bright yellow birds flying over Brooklyn this morning; approaching LGA. Folks are still booking and flying them for now.
As a taxpayer, I do not want to bail them out. They are a for profit business and failed. Any other business would close their doors, they should too.
Yes, people are still booking flights because we have a stunning number of people that do not read anything of importance. As I stated before any announced deal with the government would probably be immediately challenged either from concerned parties (like other airlines) or the creditors themselves. If the bailout isn’t funded, probably by Monday, Spirit is done.
I will have to get to my schedule and make sure I have ample time because the YT meltdown videos of people arriving at the airport with a Spirit ticket and no one at the counter, no plane and no crew should be epic.
Say goodbye to all of this….
GOODBYE, ALL OF THIS!
…and hello to oblivion.
HELLO, OBLIVION!
The employees have known about the dire straits that Spirit has been in for more than a year. They had all that time to look for another job. If two bankruptcies and the constant threat of running out of money within days which has been going on for month now, was not a clue–then perhaps liquidation would be the a better incentive to move them on to other more stable airlines/employers.
A government welfare check is an awful idea. But Trump is scared as heck about the midterms and can’t have 14,000 jobs lost in one day on his watch so he’ll do anything (legal or not) to avoid that news cycle. It’s sad.
The MAGA coalition has already shown cracks, starti ng with a giant one over the Epstein files procrastination. Other events have exacerbated this. A taxpayer bailout of Spirit would be the final straw. Enough members of the base will stay home in November to end Trump as a political entity. Likely torpedoing JD Vance as well.
Duffy used to be tea party. If he wants to retain a shred of credibility he should say “no bailout, or I resign”.
@Raphael Solomon: Contact your credit card company for a refund.
Let. Spirit. Die.
This is insanity.
Given how close to home it hits, Donald Trump has a real affection for failing businesses.
Giving them money is like flushing money down the toilet, they just need to liquidate,yes I feel bad about all the employees,but all the good employees will get hired on by other airlines,the creditors will get some money,there management cant realize that there business model does not work anymore, thats why they are in Bankruptcy again within 1 yr