Spirit Airlines Ch.11
06-12-2024, 01:51 AM
#51
Gets Weekends Off
Joined APC: Dec 2022
Posts: 858
If Spirit is unable to secure a refinance deal what would the airline look like if the doors don't close?
Could they sell off planes to pay off the debt payment next year and let the airline bleed down to a smaller size. Maybe 150 planes and 2000-2200 pilots? Or would Chapter 11 or worse be next?
Could they sell off planes to pay off the debt payment next year and let the airline bleed down to a smaller size. Maybe 150 planes and 2000-2200 pilots? Or would Chapter 11 or worse be next?
No planes left to sell. They did that six months ago. It’s all leased. New HQ is owned as I understand it
06-12-2024, 04:29 AM
#52
Gets Weekends Off
Thread Starter
Joined APC: Oct 2017
Posts: 3,230
this cannot be understated! We really need this debt negotiation to work. Lots of pilots here including senior captains are in for a rude awakening…they have no idea.
06-12-2024, 05:04 AM
#53
Gets Weekends Off
Joined APC: Feb 2007
Position: Airplanes
Posts: 1,395
Have you seen our bond prices? 2025 bonds are in the 70 cent range and the 2026 bonds are near 50 cents. The lenders are already taking a bath on SAVE debt.
06-12-2024, 05:16 AM
#54
Gets Weekends Off
Joined APC: May 2015
Posts: 467
In maybe wrong… and if so .. fine .. but I’m willing to Bet in 10 years from now .. the people who ‘Remain seated…. Remain seated…remain seated’
will be juts fine.. and possibly even better then the ones who ‘evacuate… evacuate.. evacuate’
it’s a calculated risk.. but this isn’t the ‘seniors’ first rodeo ..
you can panic and flip the seat belt sign on and freak out .
ill drink my coffee.. I’ve navigated many many storms. I will this one as well.
06-12-2024, 06:53 AM
#55
Gets Weekends Off
Joined APC: Jul 2015
Position: MD-88 FO
Posts: 1,571
lots of senior captains, indeed do have an idea. We have been around the industry for more than 4 years like some of these newbs. This industry can knee cap you in a second. And most of us ‘seniors’ experienced the lost decade, and are keenly aware of possible outcomes. Emphasis on the word possible. There are storm clouds in the area. Seat belt sign is on and we are paying attention.. having some light to moderate in the vicinity doesn’t mean an imminent crash is happening. Many companies have filed chapter 11 and subsequently survived and thrived. Chapter 7 would indeed suck but I’m financially prepared for any of it.
In maybe wrong… and if so .. fine .. but I’m willing to Bet in 10 years from now .. the people who ‘Remain seated…. Remain seated…remain seated’
will be juts fine.. and possibly even better then the ones who ‘evacuate… evacuate.. evacuate’
it’s a calculated risk.. but this isn’t the ‘seniors’ first rodeo ..
you can panic and flip the seat belt sign on and freak out .
ill drink my coffee.. I’ve navigated many many storms. I will this one as well.
In maybe wrong… and if so .. fine .. but I’m willing to Bet in 10 years from now .. the people who ‘Remain seated…. Remain seated…remain seated’
will be juts fine.. and possibly even better then the ones who ‘evacuate… evacuate.. evacuate’
it’s a calculated risk.. but this isn’t the ‘seniors’ first rodeo ..
you can panic and flip the seat belt sign on and freak out .
ill drink my coffee.. I’ve navigated many many storms. I will this one as well.
06-12-2024, 07:24 AM
#56
Gets Weekends Off
Joined APC: Feb 2014
Position: CA
Posts: 327
lots of senior captains, indeed do have an idea. We have been around the industry for more than 4 years like some of these newbs. This industry can knee cap you in a second. And most of us ‘seniors’ experienced the lost decade, and are keenly aware of possible outcomes. Emphasis on the word possible. There are storm clouds in the area. Seat belt sign is on and we are paying attention.. having some light to moderate in the vicinity doesn’t mean an imminent crash is happening. Many companies have filed chapter 11 and subsequently survived and thrived. Chapter 7 would indeed suck but I’m financially prepared for any of it.
In maybe wrong… and if so .. fine .. but I’m willing to Bet in 10 years from now .. the people who ‘Remain seated…. Remain seated…remain seated’
will be juts fine.. and possibly even better then the ones who ‘evacuate… evacuate.. evacuate’
it’s a calculated risk.. but this isn’t the ‘seniors’ first rodeo ..
you can panic and flip the seat belt sign on and freak out .
ill drink my coffee.. I’ve navigated many many storms. I will this one as well.
In maybe wrong… and if so .. fine .. but I’m willing to Bet in 10 years from now .. the people who ‘Remain seated…. Remain seated…remain seated’
will be juts fine.. and possibly even better then the ones who ‘evacuate… evacuate.. evacuate’
it’s a calculated risk.. but this isn’t the ‘seniors’ first rodeo ..
you can panic and flip the seat belt sign on and freak out .
ill drink my coffee.. I’ve navigated many many storms. I will this one as well.
06-12-2024, 07:34 AM
#58
Prime Minister/Moderator
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 40,034
History suggests that juniors should bail before they get furloughed or stuck with low QOL for a long time. It suggests seniors should probably hang tight. If you're in the middle, don't know what to tell you.
While I think a lot of the history is applicable, I don't think liquidation is quite as likely as it has been in the past. There are fewer airlines today, and they are larger than in the past so loss of even one (aside from sunny) would impact the consumers. In this case it would have a disproportionate impact on politically-protected consumers, at least until Jan.
Who knows, .gov might even approve an emergency merger, just to keep the metal in the sky.
While I think a lot of the history is applicable, I don't think liquidation is quite as likely as it has been in the past. There are fewer airlines today, and they are larger than in the past so loss of even one (aside from sunny) would impact the consumers. In this case it would have a disproportionate impact on politically-protected consumers, at least until Jan.
Who knows, .gov might even approve an emergency merger, just to keep the metal in the sky.
06-12-2024, 08:53 AM
#60
Gets Weekends Off
Joined APC: Jan 2018
Posts: 2,335
Bonds ratings companies generally know what they are doing. Fitch has a good report here: thttps://www.fitchratings.com/research/corporate-finance/fitch-downgrades-spirit-airlines-to-ccc-07-05-
2024
tldr:
Spirit Airlines is currently facing severe financial and operational challenges, prompting Fitch Ratings to downgrade its Long-Term Issuer Default Rating to 'CCC'. The airline is struggling with persistent negative operating margins and diminishing financial flexibility, primarily due to overcapacity in key markets and uncertainty around the availability of A320 NEO engines. Despite having $898 million in cash and short-term investments, and an additional $300 million available under a revolving credit facility, Spirit's liquidity is under pressure from ongoing cash burn. The company faces critical refinancing needs for its 2025 loyalty bonds and 2026 convertible notes, and there is a heightened risk of a distressed debt exchange, which could lead to bankruptcy if refinancing efforts fail. To address these issues, Spirit is implementing cost-cutting measures and strategic changes to improve its brand image and revenue, though these efforts carry execution risks and will take time to yield results. Overall, the outlook for Spirit Airlines is precarious, with a significant risk of bankruptcy if it cannot manage its liquidity and refinancing needs effectively.
They seem to suggest a Chapter 11 vs Chapter 7 would be the best approach.
2024
tldr:
Spirit Airlines is currently facing severe financial and operational challenges, prompting Fitch Ratings to downgrade its Long-Term Issuer Default Rating to 'CCC'. The airline is struggling with persistent negative operating margins and diminishing financial flexibility, primarily due to overcapacity in key markets and uncertainty around the availability of A320 NEO engines. Despite having $898 million in cash and short-term investments, and an additional $300 million available under a revolving credit facility, Spirit's liquidity is under pressure from ongoing cash burn. The company faces critical refinancing needs for its 2025 loyalty bonds and 2026 convertible notes, and there is a heightened risk of a distressed debt exchange, which could lead to bankruptcy if refinancing efforts fail. To address these issues, Spirit is implementing cost-cutting measures and strategic changes to improve its brand image and revenue, though these efforts carry execution risks and will take time to yield results. Overall, the outlook for Spirit Airlines is precarious, with a significant risk of bankruptcy if it cannot manage its liquidity and refinancing needs effectively.
They seem to suggest a Chapter 11 vs Chapter 7 would be the best approach.
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