CincoDeMayo

https://www.reuters.com/business/aerospace-defense/spirit-airlines-talks-with-bondholders-over-terms-potential-bankruptcy-filing-2024-10-03/

Unlocked article

SSlow

But why the sell off?

I thought wall street was already clued in. It's not like this came out of left field or anything.

redhot

I believe the majority of spirits stock is now owned by retail investors and they probably got spooked, and decided to pull the ripcord.

https://www.tipranks.com/stocks/save/ownership

Don't know how credible this is, but that shows ownership of SAVE

Halon1211

Google Spirit Airlines right now.

last five minutes, just flooding with news articles about filing Ch. 11 bankruptcy.


this is the final step in the merger plan!

Who shall be our prince charming to sweep up this damsel in distress that just fell into the river??

Ted Striker

I wonder if a re-bid by jb would ever be in the cards. The court specifically cited spirit as a ulcc being a reason for denial. It seems spirit has “transformed” mostly on paper to more align with and become a LCC, paving the way for a merger. Especially with jb’s recent debt raise for 3billion. Now, jb comes in from a pre-bankruptcy play at say $22 p/s etc.

Flyby1206

I’d be shocked. I think F9 is a likely candidate though.

CatPilot1

From airliners.net

Once the judge has accepted the Ch 11 petition - pretty much automatic, I believe - management has a 120-day period of exclusivity to restructure the business. There can be no hostile takeover offers. There can be no friendly takeover offers without approval of the judge and creditors' committee within that period. That 120-day period can be extended by the judge out to 18 months.

That's one of the reasons that U.S. Chapter 11 restructuring is so powerful in helping firms restructure, and why carriers like LATAM, Aeromexico, and SAS used U.S. courts. Once you let creditors and takeover specialists pick at the carcass there's quickly nothing left.

Flyby1206

That 120 day+ period could be used for NK mgmt to secure the merger that they want, and of course get the creditors onboard too. No JB c-blocking the merger like before.

GoCats67

I think the real issue will be the aircraft that are leased. Bankruptcy laws have requirements on lessors to not reposses for, I believe, 60 days. The problem is that when the majors were going through bankruptcy in the earlier 2000s, the demand for aircraft was at rock bottom and Boeing and Airbus were having no problems with production of their new narrowbodies. That meant that during those 60 days you could enter into actual negotiations on what the lease rates were going to be going forward. In today's market a narrowbody (that doesn't have the Pratt and Whitney engine issues) would be of interest to many airlines right now and I am sure that the lessors would gladly shift thire assets to AA,DL,UA. That means that Spirit doesn't have much leverage with that entire portion of their cost structure.

I think the same can be said for their pilot pay portion of their costs. If they try to cut that, the loss of pilots will go up even higher than it is already. All at a time when American is about to (theoretically) jump back in to hiring pilots. The slowdown for UA and DL (only 1000+ pilots per year) is due to a lack of aircraft deliveries, If a lessor had a bunch of aircraft available, the airline that got them would be highering even faster. So, again different from the last decades ago bankruptcies, there would be many places for the pilots to go. That would make cutting pilot pay at Spirit a death wish.

So, these bondholders better be ready to take a Marine high and tight haircut!!!

RiddleEagle18

My thoughts as well. The CEO airplanes will be in high demand the the leasing companies will be able to get top dollar on the open market. They will be in no hurry to accept a discounted lease from spirit.