Spirit Airlines has missed its deadline for filing a report on its third-quarter financial results with the US Securities and Exchange Commission (SEC) amid reports that it is considering financial restructuring through bankruptcy.
The beleaguered ultra-low-cost carrier (ULCC) disclosed on 12 November that it is “unable to file its quarterly report” and had instead filed form 12b-25, required when companies miss their deadline to file 10Q and 10K reports.
Spirit says it remains in discussion with bondholders to restructure debt coming due next year and in 2026 “as well as exploring strategic alternatives and other ways to improve liquidity for the company”.
”The negotiations, with a super-majority of the noteholders, have remained productive, have advanced materially and are continuing in the near term, but have also diverted significant management time and internal resources from the company’s processes for reviewing and completing its financial statements and related disclosures,” Spirit says.
If the ULCC reaches and agreement with bondholders, Spirit says it would be “effectuated through a statutory restructuring that is not expected to impair general unsecured creditors, employees, customers, vendors, suppliers, aircraft lessors or holders of secured aircraft indebtedness”.
That restructuring would “lead to the cancellation of the company’s existing equity”, however. If it fails to agree on a restructuring plan, Spirit says, “the company will consider all alternatives”.
Spirit’s third-quarter operating margin is expected to be about “12 percentage points lower” than the figures it reported during the same period of last year.
Total operating revenues are expected to decrease by about $61 million year-on-year. Spirit cites lower average yields, ”including the negative impact from the company no longer charging for change and cancellation fees”.
Spirit’s financial manoeuvres come as The Wall Street Journal reports that talks to be acquired by rival ULCC Frontier Airlines have collapsed, and it is preparing to file for bankruptcy protection.
The carrier reported on 31 October that it is planning to furlough hundreds more pilots starting on 31 January to match its drastic cuts to passenger capacity, as it trims unprofitably routes from its network.
Spirit disclosed in August that it was deferring deliveries of new Airbus jets, furloughing about 240 pilots and downgrading 100 captains to first officers. The carrier also started offering unpaid time off to flight attendants and suspended new flight crew recruiting, among other cost-cutting measures.
More recently, Spirit reached an agreement to sell 23 of its older Airbus A320-family jets to GA Telesis, boosting its liquidity by about $225 million.
The company is expecting a 20% year-on-year capacity decrease in the fourth quarter, and for its capacity to be down in the “mid-teens” percentage range year on year for 2025.
While some industry watchers have speculated that JetBlue Airways could potentially revisit its proposal to acquire struggling Spirit – which was blocked by a federal judge in January – JetBlue chief executive Joanna Geraghty recently emphasised that it its not interested in reviving the deal.
