Spirit Airlines Files for Bankruptcy Again, Seeks Labor Cuts to Survive
Spirit Airlines has filed for Chapter 11 bankruptcy for the second time in less than a year. The budget airline is seeking $100 million in concessions from pilots and flight attendants to renegotiate labor contracts. It has also received approval for up to $475 million in DIP financing to keep operations running smoothly.
Spirit has informed the Association of Flight Attendants (AFA-CWA) of its intent to use Section 1113 of the Bankruptcy Code to modify their collective bargaining agreement. The airline hopes to reach tentative agreements with one or both workgroups by the end of Thursday to access vital bankruptcy funding. However, the flight attendant union has drawn red lines, including reducing base pay or increasing health care costs.
If no agreements are reached, Spirit plans to file a request with the bankruptcy court to amend or terminate labor contracts. The airline is also considering furloughing as many as 1,800 flight attendants, around a third of its total crew workforce. Spirit aims to use the Chapter 11 process to shrink its business to a profitable size and reduce costs. The airline's labor unions involved in the negotiations include the Airline Pilots Association (ALPA), the Transport Workers Union (TWU), and other related aviation unions representing pilots and cabin crew.
Spirit Airlines is in the midst of complex negotiations with its labor unions, seeking concessions to secure its financial future. With the approval of $475 million in DIP financing, the airline hopes to use the bankruptcy process to reorganize and emerge as a leaner, more profitable company.
