I need to know
- Spirit Airlines has just warned its investors that the company cannot survive in the next 12 months
- The quarterly gain report occurs five months after Spirit emerged from the bankruptcy of Chapter 11 in March
- The CEO of the Frontier Airlines competition, Barry Biffle
Spirit Airlines has just noticed that the company cannot survive in the next 12 months.
On August 11, the airline published its quarterly gain report, which described the bleak performance in the midst of the «weak demand» of travel.
«The company has remained affected by the adverse market conditions, including high national capacity and the continuous weak demand for national leisure trips,» the report said. It is expected that «challenges and uncertainties» continue during the rest of the year, at least.
The report occurs five months after Spirit arose from the bankruptcy of Chapter 11 on March 12.
The company has introduced new product improvements, including a premium economy travel option and is also reducing costs, pointing out the pilot permits announced in July.
Paul Hennessy/Images/LightCket soup through Getty Images
Despite the changes, Spirit needs its finances to improve more quickly than it is «anticipating» currently and there are «substantial doubts about the company’s capacity to continue as a company underway within 12 months,» the report said.
Spirit Airlines has faced a series of serious challenges in recent years.
On November 18, 2024, the company confirmed its «pre -established» presentation at the United States Banking Court for the Southern District of New York, according to a statement. However, the airline explained that it would continue to operate as usual during the holiday season and in 2025.
In January, a Federal District Judge blocked Spirit’s attempt to merge with other airline jetblue, according to Associated Press. At that time, the new Jetblue CEO called the proposed fusion of $ 3.8 billion «a bold and brave plan destined to shake the status quo of the industry.»
Spirit’s new report occurs only a few days after the CEO of Frontier Airlines, Barry Biffle, warned about the future of affordable trips.
«It will continue to be a reduction in the capacity in this industry,» Biffle said during the company’s second trimester call on August 5, by The economic times.
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The CEO predicted that airlines will have to reduce the number of flights and active routes, since many are not profitable.
«I’m talking about national rates in the domestic market,» Biffle said in the call. «We believe that the entire industry is not earning money (…) the nomental (side) is not earning money. And that is because there is too much supply in relation to demand.»
