Spirit Airlines is in discussions with investment firm Castle Lake for a potential acquisition as the airline attempts to recover from its second Chapter 11 bankruptcy filing in a year. Past merger talks between Spirit and Castle Lake have occurred over several years but have not resulted in an agreement, especially after a previous deal collapsed due to a surprise cash offer from another airline.
In December, Spirit announced a $50 million funding agreement with creditors, essential for its operations, and highlighted ongoing negotiations for additional financing linked to restructuring or strategic options. To survive, Spirit has cut flights, reduced its fleet, and downsized staff, including salary concessions from its pilots and crew, totaling around $100 million.
Historically, Spirit has boasted consistent profitability, but recent challenges from the pandemic—such as rising operational costs, changing consumer preferences, and an oversaturated flight market—have affected its financial stability. The company has also faced issues with grounded aircraft due to engine recalls. In the competitive landscape dominated by major airlines, Spirit has tried to attract higher-paying customers by improving its service offerings.
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