Spirit Airlines has filed for bankruptcy for the second time in less than a year after a previous reorganisation failed to put it on a firmer financial footing.
The American budget airline failed to secure its finances Chapter 11 filing in March, according to CNBC.
In response, Spirit said it will reduce its network and shrink its fleet, cuts that they hope will reduce costs by “hundreds of millions of dollars” a year.
“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” Spirit CEO Dave Davis said in a news release on Friday.
This comes after the airline reported a net loss of around US$246 million in the three months ending in June. Following the cash crunch, the company said it borrowed the entire $275 million available under its revolving credit facility.
The airline was also attempting to rebrand from a no-frills budget airline to a premium brand, but this failed as consumer spending was still down and Americans dealt with inflation and fears over tariff-related price increases.
Spirit filed for bankruptcy last November after a string of failed mergers, growing debt and years of operating at a loss, making it the first U.S. airline to declare bankruptcy since 2011.
It also posted a net loss of $1.2 billion in 202, with its troubles compounded by the loss of the $3.8 billion merger with JetBlue Airways and RTX’s Pratt & Whitney engine issues that forced it to ground many of its Airbus jets.
The bankruptcy comes after travel demand to the U.S. slumped following Donald Trump's becoming president.
