'I think the current business plan is not going to work and, if they pursue it, Chapter 11 will be a brief pit stop on the way to Chapter 7,' Scott Kirby, CEO of United Airlines, said at an event at Washington's Dulles International Airport on Thursday. Many in the airline industry echo his sentiment, questioning Spirit's plans as it attempts to grow revenue with premium products while only marginally improving its financial standing.
Spirit remains dedicated to pairing great value with excellent service and firmly believes our low-fare business model is important for competition in the U.S. domestic airline market, which is 80% controlled by four dominant carriers,' a spokesperson for the airline shared. This assertion highlights their commitment despite challenges, with an emphasis on the importance of low-cost options in a market dominated by major players.
The airline filed for 'Chapter 11' bankruptcy, or court-led restructuring, in November in part to address a $1 billion-plus debt bill due in 2025. Despite efforts to implement its restructuring plan, the airline projects a significant loss this year, raising concerns about its long-term viability.
A liquidation would leave any travelers with tickets on Spirit in the lurch. Any potential refunds would be up to a bankruptcy court judge to grant and the wait could be months or even years. Additionally, Spirit loyalty points would evaporate overnight, creating a predicament for loyal customers.
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