Spirit Airlines Bankruptcy Talks Worry Markets
The publication of talks with investors involving a possible bankruptcy filing sent the shares of Spirit Airlines tumbling this week.
In March this year, JetBlue and Spirit Airlines gave up on their hopes for a merger. Had their plans gone ahead, the joined airline would have been the fifth-largest in the country and would have operated under JetBlue’s banner as a leisure carrier, rather than an Ultra Low Cost Carrier.
Photo: Jack PlantThat move away from Spirit’s ULCC model was the main reason why a federal judge sided with the U.S. Department of Justice and blocked the $3.8 billion deal. The reasoning was that the flying public would suffer from rising ticket prices, and a reduction of available seats. The latter was because Spirit’s planes would be fitted with fewer seats after the transition.
However, soon after JetBlue’s purchase of Spirit Airlines failed, Industry observers indicated that a bankruptcy or reorganization of Spirit was in the cards. And, some..