Days after disclosing plans to restructure through Chapter 11 bankruptcy, Spirit Airlines says it expects to be de-listed from the New York Stock Exchange (NYSE).
In a 20 November filing with the US Securities and Exchange Commission (SEC), the Florida-based carrier said that the exchange has determined Spirit’s stock – which trades under the SAVE ticker –”is no longer suitable for listing”.
The exchange will apply with the SEC to remove Spirit’s listing, and Spirit does not intend to appeal the determination.
“Therefore, it is expected that the common stock will be de-listed from NYSE,” Spirit says.
Trading of Spirit’s stock was suspended on 18 November, following disclosure of its bankruptcy filing. The stock has since started trading on the OTC Pink Market – ”a significantly more-limited market” than the NYSE, Spirit says. “The company can provide no assurance that its common stock will continue to trade on this market.”
On 19 November, the company said its request for “day one” financial relief had been granted by Bankruptcy Court for the Southern District of New York, allowing it to continue paying workers and vendors during the Chapter 11 process.
”Among other benefits, this relief ensures that Spirit’s team members, vendors and other counter-parties will continue to be paid in full in the ordinary course of business and that guests can continue to book and fly without interruption and use all tickets, credits and loyalty points as normal,” the carrier says.
Some airline analysts have raised concern about whether the roughly $105 million in unused miles held by Spirit customers would retain value should the carrier pivot to liquidation.
Spirit says it has no intention of ceasing operations. The airline’s bondholder-approved reorganisation plan – which includes equitising $795 million of funded debt and $350 million of “committed equity capital” upon emerging from bankruptcy – is still subject to confirmation by the court, Spirit adds.
It expects to emerge from the Chapter 11 process in the first quarter of next year, with company executives maintaining that the post-bankruptcy airline will be better positioned to compete in the USA’s low-cost segment.
Once the fastest-growing US airline, Spirit has stalled in the post-pandemic air-travel environment. Too many airline seats to popular vacation cities hastened Spirit’s downfall, as has a recall of the Pratt & Whitney geared turbofan engines that power its Airbus A320neo-family aircraft.
The carrier struggled most severely following the collapse of a planned deal under which it would be acquired by JetBlue Airways. The US government sued to block that acquisition on anti-competitive grounds, and a federal judge agreed, ruling earlier this year that the plan be terminated.
Spirit’s Chapter 11 filing came shortly after reports that its possible acquisition by rival Frontier Airlines had fallen apart, and after Spirit missed a deadline to file its third-quarter financial report.
