Spirit Airlines files for Bankruptcy

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and why Spirit Airlines is filing for bankruptcy.

Transcript

00:00I'm Conway Gittens reporting from New York City. Here's what we're watching on the street today.

00:04Wall Street looked to the bond market for guidance on Monday following the biggest weekly stock market

00:09route in two months. Investors are focusing on the strength of the economy and whether that

00:14will now prompt the Federal Reserve to move slower on cutting interest rates. In other news, Spirit

00:21Airlines has filed for bankruptcy. The ultra low-cost airline struggled to compete in a

00:25marketplace where ticket prices dropped for domestic travel and more Americans flew to

00:30international destinations post-pandemic. But there's good news for Spirit's frequent flyers.

00:37In an open letter posted on its website, Spirit says, quote, the most important thing to know

00:43is that you can continue to book and fly now and in the future. Adding, customers, quote,

00:49can use all tickets, credits and loyalty points as normal. The question remains, however,

00:56what destinations will still be available? The company has already sold off dozens of planes

01:01in an attempt to raise cash and stay afloat. In addition, it is cutting back on the number of

01:07routes, resulting in the layoff of roughly 200 pilots in September and 330 more planned for

01:14January. Though a blocked acquisition by JetBlue was the last straw, Spirit has been struggling

01:20for years. It has not made a profit since 2019 and lost more than $335 million in the first half

01:28of 2024. The company's famous or infamous business model of charging bargain basement fares but then

01:35charging fees for everything like printing and boarding pass worked until larger carriers tweaked

01:40their pricing. Spirit expects to exit bankruptcy reorganization by the first quarter of 2025.

01:48And that'll do it for your daily briefing. From New York City, I'm Conway Gittens with The Street.

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