Spirit Airlines files for Chapter 11 bankruptcy protection

Budget carrier Spirit Airlines has filed for Chapter 11 bankruptcy protection as it looks to restructure its debt after merger talks with Frontier collapsed.

Spirit Airlines said passengers could "continue to book and fly without interruption", adding that all tickets, credits and loyalty points remained valid.

The airline listed its estimated assets and liabilities in the range of $1.0bn to $10.0bn each, according to a court filing on Monday, and has already entered into an agreement with bondholders that was expected to lower total debt and provide increased financial flexibility. As part of the prearranged Chapter 11, Spirit received commitment for a $350.0m equity investment from existing bondholders, who will also provide $300.0m in debtor-in-possession financing.

Chief executive Ted Christie said: "I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalisation of the company, which is a strong vote of confidence in Spirit and our long-term plan.

"This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our guest experience, providing new enhanced travel options, greater value and increased flexibility."

As of 1400 GMT, Spirit shares were down 3.70% in pre-market trading at $1.12 each.

Reporting by Iain Gilbert at Sharecast.com