Spirit Airlines has recently completed a significant restructuring process, emerging from bankruptcy and opting to go private. The U.S. Bankruptcy Court approved a plan converting $795 million of debt into equity, transferring control to the airline’s major bondholders. As part of this restructuring, Spirit is also receiving a fresh $350 million equity investment and issuing $840 million of new senior secured debt.
The airline’s new strategy involves redefining its low-fare travel offerings, moving away from its traditional base-fare model to a tiered system with bundled options. The most premium offering, Go Big, includes amenities akin to business class on a budget airline, such as priority check-in, larger seats, and complimentary snacks and drinks. This shift aims to attract more affluent travelers, despite the challenges of catering to an audience typically served by major carriers.
Spirit is also introducing other fare bundles like Go Comfy and Go Savvy, which offer various benefits like blocked middle seats and more flexible ticket options. However, this strategic pivot has sparked criticism from some who believe Spirit is straying from its identity as a low-cost carrier focused on affordability.
The restructuring and strategic realignment come as Spirit aims to enhance its product offerings, return to profitability, and secure long-term success under the continued leadership of CEO Ted Christie. The main bondholders, including firms like Citadel Advisors and Pacific Investment Management, have approved Christie’s leadership moving forward.
