Overview

• Spirit Aviation Holdings filed voluntary Chapter 11 petitions on August 29 in the Southern District of New York and said flights, ticket sales and loyalty benefits will continue during the process.
• The carrier plans to redesign its route map and rightsize its fleet to cut costs by hundreds of millions of dollars, with unions cautioning about furloughs as the company seeks further efficiencies.
• Lessor AerCap issued an August 25 default notice and moved to terminate dozens of future aircraft leases that would cost Spirit more than $2 million per lease, a claim Spirit disputes in court filings.
• Liquidity pressures include a roughly $246 million Q2 loss, a 26% year-over-year revenue decline, a fully drawn $275 million revolver and increased collateral demands from credit card processing partners.
• Frontier shares surged as analysts projected capacity could come out of the market; Frontier recently announced 20 new routes overlapping Spirit service and held high-level talks with Spirit leadership with no merger discussed.