Spirit Airlines To Hang On By A $100 Million Thread

Filing for bankruptcy twice in a year is never a good sign of financial health for any business. Despite its competitors preparing for the worst last weekend, Spirit Airlines didn't cease operations and will live to fly another day. The ultra-low-cost carrier announced on Monday that it had secured an additional $100 million in financing. Spirit is still restructuring after its Chapter 11 bankruptcy filing in August.

Considering that from Thanksgiving to New Year's Day is the busiest air travel period of the year, it's not the best time for an airline to downsize. According to Simple Flying, Spirit gained access to additional funding through an amendment to its debtor-in-possession credit agreement. The carrier received $50 million immediately to cover day-to-day expenses. If Spirit reorganizes or pursues a sale, another $50 million will be available to the airline. As a point of reference, the airline was losing $3.1 million a day in October from operations alone. Liquidity is a massive issue for Spirit's efforts to stay afloat.

Spirit's competitors had feared that the canary-yellow planes would suddenly stop flying last weekend if the airline didn't meet a bankruptcy milestone by a December 13 deadline. According to The Air Current, at least two U.S. carriers were planning for Spirit's immediate collapse. If Spirit suddenly shut down, there would have been thousands of stranded passengers desperately searching for a way home with another carrier. Flights would quickly fill up as people book at the last second with Spirit rescue refunds.

I can't say that other airlines are cheering on Spirit's demise, but they certainly aren't sad about it. In September, a United Airlines executive stated in a press release that the airline was flying larger planes between Chicago and LaGuardia in case Spirit suddenly collapsed. Later that week, United CEO Scott Kirby predicted that Spirit would go out of business. Plenty of competitors do have an interest in Spirit failing. The collapse would make its Airbus A320neo fleet available for purchase. Only time will tell if the low-cost carrier survives or is bought up by another airline.