Spirit Airlines raises going-concern doubts, months after exiting bankruptcy
Adverse market conditions such as elevated domestic capacity and weak demand for leisure travel in the second quarter has resulted in a tough pricing environment for airline, it said in its quarterly report on Monday.
The company expects these pressures to persist through the rest of the year, adding to operational uncertainty. Last month, Spirit said it would furlough about 270 pilots, while demoting another 140, to conserve cash.
The Florida-based airline, known for its bright yellow livery, had filed for bankruptcy protection last November, after years of losses, failed merger attempts and heavy debt.
It was the first major U.S. carrier to file for Chapter 11 since 2011. It emerged from bankruptcy in March after a court approved restructuring backed by its creditors.
Uncertainty stemming from President Donald Trump's sweeping tariffs and budget cuts have prompted travelers to curb spending and reassess plans.
The airline said on Monday that its credit-card processor has asked it to set aside more funds as collateral or risk losing its contract, which is set to expire on Dec. 31.
To address the concerns, Spirit said it plans to bolster liquidity by selling or monetizing aircraft and real estate and shedding excess airport gate capacity.
Uncertainty over meeting minimum liquidity covenants and the outcome of talks with stakeholders have raised substantial doubt about the company's ability to continue as a going concern over the next 12 months, it said.
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