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In the past couple years, plenty of chains have declared bankruptcy, like Bed, Bath & Beyond, Christmas Tree Shops, Tuesday Morning, Big Lots, Red Lobster, Express, TGI Fridays and many others, but bankruptcy isn't just hitting retailers, it's affecting many of other companies as well, including airlines. On Monday (11/18), Spirit Airlines filed for bankruptcy.
The decision comes after the budget airline's attempt budget to merge with JetBlue was blocked by a federal judge who said that the deal would create higher costs for passengers and reduce the number of low-cost fares available.
As for customers, in an open letter to anyone who holds a ticket for a future flight, the airline said, "The most important thing to know is that you can continue to book and fly now and in the future." In their bankruptcy filing, Spirit explained that they are seeking to restructure and reduce their debt.
CEO and President Ted Christie explained a supermajority of company bondholders voted for the bankruptcy, calling the restructuring a "vote of confidence" in the company's long-term outlook. He stated, "This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our Guest experience, providing new enhanced travel options, greater value and increased flexibility."
Meanwhile, the FAA said in a statement that part of their oversight of airlines is assessing "significant changes in the operating environment, which could include financial distress." They noted, "We have been continuously evaluating Spirit Airlines through our regular oversight process to ensure its resources, size, and organizational structure enable it to meet all operational requirements."
Spirit's plan is to have the restructuring process completed by March.