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Spirit Airlines is working with financial advisors as it seeks new strategic options after recent restructuring efforts failed to secure its future. The Wall Street Journal reported that the airline has enlisted PJT Partners, an investment bank based in New York City, to assist with this process.
The airline faces ongoing challenges due to weak domestic demand, low cash reserves, and unsuccessful attempts at restructuring. Spirit Airlines filed for Chapter 11 bankruptcy last year, becoming the first major U.S. carrier since 2011 to do so. This allowed the company to reorganize its debts and negotiate alternative payment plans with creditors.
According to Reuters, Moody’s Ratings recently downgraded Spirit’s credit rating to junk status because of high cash burn rates and continued financial losses. Fitch also issued a downgrade earlier. “This highlighted the Floridian carrier's higher-than-usual cash burn,” the press release noted. In the first half of this year, Spirit is expected to spend more than $500 million from its cash reserves due to soft demand and increased competition in the domestic market.
