Spirit Airlines filed for Chapter 11 bankruptcy in late August, with plans to overhaul its operations to bring in financial stability and revenue. According to a report from Law360, the airline was granted millions in emergency funds to help restructure its business.
Judge Sean H. Lane in New York approved Spirit Airlines to draw $275 million from its revolving credit facility, revenue, and other accounts associated with the airline. The move was described as an “obvious necessary” in order for the airkine to undergo its plan.
After filing for a second bankruptcy within a year, Spirit also recently received approval from the bankruptcy court to continue with its normal operations.
“We are pleased to have reached this first milestone in our restructuring process, which will support normal operations as we take decisive action to ensure that Spirit continues delivering the best value in the sky for years to come,” said Spirit President and CEO Dave Davis in a statement.
“With these approvals in place and access to the many new tools now available to us, we can continue to implement our transformation to build a stronger foundation and future for Spirit.”
Part of its bankruptcy came after the unexpected termination of aircraft leases from its largest lessor, AerCap. But reports state the airline was already in trouble with dept and less demand.
As part of its overhaul, the Florida-based airline announced early on that it would cut operations to 11 cities. Its plans included cutting costs where possible, reducing their presence in certain cities, and focusing their efforts on high-profit networks.
Delta Airlines is also on the chopping block, eliminating one major city from its flight plans starting in the fall. Meanwhile, some of Spirit Airlines’ competitors are taking advantage. Frontier Airlines is filling the gap, having added 20 new domestic flight routes last month.
