Spirit Airlines Extends Debt Refinancing Deadline

By Rajesh Kumar Singh

CHICAGO (Reuters) – Spirit Airlines (NYSE:SAVE) announced on Friday that it has reached an agreement with its credit card processor to extend a debt refinancing deadline by two months until Dec. 23.

The extension agreement with U.S. Bank National Association allows Spirit some breathing room to refinance its $1.1 billion loyalty bonds, which are due to mature next year. The previous refinancing deadline was Oct. 21.

The Florida-based discount carrier also reported having fully drawn down its $300 million revolving credit facility and expects to end the year with over $1 billion in liquidity.

Despite strong travel demand, Spirit has been losing money, failing to report a profit in five of the last six quarters, raising doubts about its ability to manage looming debt maturities.

These concerns have heavily impacted its shares, which have slumped about 91% this year compared to a 31% gain in the S&P 500 passenger airlines index.

In a regulatory filing, Spirit mentioned it is still in "active and constructive discussions" with its bondholders regarding upcoming maturities.

Spirit's uncertain future follows the collapse of its $3.8 billion merger deal with JetBlue Airways (NASDAQ:JBLU). The airline warned of a larger third-quarter loss due to a competitive market for price-sensitive leisure travelers and an oversupply of domestic airline seats.

Additionally, Spirit has been significantly affected by issues with RTX's Pratt & Whitney Geared Turbofan engines, leading to grounded aircraft and increased costs. To boost revenue, it is attempting to attract premium travelers and is committed to cost-cutting measures, including downgrading and furloughing pilots, offering voluntary unpaid leaves to flight attendants, and deferring all aircraft deliveries from Airbus.