Spirit said Monday that it has secured a new round of funding from its creditors, at least temporarily warding off concerns that it was set for collapse.
The ultra-low-cost airline confirmed it reached a deal for a third draw of $100 million, which will be used to support operations while Spirit remains under Chapter 11 bankruptcy protection. Spirit will get $50 million up front, and the remaining amount will be tied to progress on the carrier’s reorganization plan or a “strategic transaction,” officials said in a statement.
“Spirit is currently in active negotiations on each of these possibilities,” the statement continued.
The airline did not say what kind of “strategic transaction” it is exploring, though a sale is likely among the options under consideration.
Some industry figures have suggested that Spirit could remain viable by linking up with a competitor, such as Frontier.
“We are grateful to our lenders for continuing to support Spirit’s transformation, recognizing all the significant progress our team has made in recent months,” Spirit President and CEO Dave Davis said in a news release. “We continue to provide high-value travel options, which benefit American consumers whether they fly with us or not, and look forward to welcoming our guests aboard throughout this holiday season and into the future.”
There was speculation late last week that Spirit would not be able to secure its next round of funding and could cease operations. The Air Current reported Friday that at least two “major” U.S. carriers were preparing “rescue” flights to help stranded Spirit passengers.
The airline denied rumors of a shutdown and said flights have continued to operate normally.
