Spirit Airlines has warned it could be grounded permanently if it’s financial results don’t improve and it’s unable to raise cash.
In its quarterly earnings report this week, the carrier, which emerged from bankruptcy just five months ago, said demand continues to be weak and market conditions are still problematic. As a result, it may find itself in default.
“Because of the uncertainty of successfully completing the initiatives to comply with the minimum liquidity covenants and of the outcome of discussions with Company stakeholders, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” Spirit said in the report.
Spirit emerged from Chapter 11 in March. Prior to that filing, made last October, Spirit had not posted an annual profit since before COVID. To attract higher-paying customers, the company has launched a business-class option and blocked off the middle seat.
