Spirit Airlines Secures $300M in Funding Amidst 200 Job Losses

Spirit Airlines has received an infusion of capital totaling $300 million in funding amidst recent reports that the airline has cut 200 jobs following its Chapter 11 bankruptcy filing.

Simple Flying is reporting that Spirit Airlines signed a commitment letter for a $300 million senior secured revolving credit facility on Jan. 14. Some pre-bankruptcy debt holders pledged to give the airline more liquidity.

The U.S. Securities and Exchange Commission (SEC) filing states that the facility is divided between a $25 million uncommitted incremental revolving credit facility and a $275 million revolving credit loan and letters of credit.

But there’s a catch: The $300 million will be made available only after the business formally exits Chapter 11 bankruptcy proceedings and satisfies further requirements. After the bankruptcy process is closed, the discount airline will use the money to obtain working capital and other general corporate needs of the company and its subsidiaries.

Spirit Airlines noted that the company will pay interest at a variable rate equivalent to the adjusted term Secured Overnight Financing Rate (SOFR) plus 3.25% annually or the alternate base rate plus 2.25% annually.

Spirit Airlines Laid Off 200 Employees

About 200 Spirit Airlines employees are being let go to save expenses. The airline informed employees in several divisions last week that they were no longer required.

The layoffs come after Spirit filed for bankruptcy late last year following failed merger negotiations with Frontier Airlines. Thanks to the Chapter 11 protection, Spirit was supposed to have some financial breathing room as it worked on reorganization, which included reducing routes and improving efficiency.

“We are executing on plans to rightsize our organization to align with our current fleet size and level of flying and ultimately optimize our airline,” Spirit Airlines wrote, per CNN. “After reviewing our organizational structure, we have made the difficult decision to eliminate approximately 200 positions from various departments across the airline.”

The airline requested that 186 pilots take a sabbatical in September 2024 while it resolved some jet engine problems that caused some of the fleet to be grounded. Many flight attendants also offered to take some unpaid time off.