Spirit Airlines has reached an agreement with its senior secured noteholders to amend its debtor-in-possession (DIP) credit agreement, the airline's holding company said yesterday (December 15).
The amendment provides for the previously agreed third funding round of an incremental $100 million, which was fulfilled yesterday, with around $50 million available immediately to Spirit.
The remaining amount will be available upon meeting certain conditions of its Chapter 11 restructuring plan.
“Spirit is currently in active negotiations on each of these possibilities,” Spirit said in a statement.
"We are grateful to our lenders for continuing to support Spirit's transformation, recognizing all the significant progress our team has made in recent months," said Dave Davis, Spirit's president and CEO.
Last week, the airline ratified new agreements with its pilots and flight attendants.
Spirit Airlines pilots, represented by the Air Line Pilots Association (ALPA), voted 82% in favour of the changes, with nearly 79% of eligible pilots participating in the ratification vote.
“This vote represents Spirit pilots' direct investment in the airline's future,” said Spirit Airlines Master Executive Council chairman Ryan Muller.
“Spirit pilots made a difficult choice that provides the company with what it needs from labour to secure financing and complete its restructuring.”
Muller said Spirit had sought "far deeper cuts” but the association had “preserved all core work rules, including all scheduling and quality-of-life provisions”.
“Instead, we negotiated temporary reductions to pay rates and retirement contributions, effective January 1, 2026,” said Muller.
The agreement ensures these are restored through guaranteed increases from August 1, 2028, and January 1, 2029. Spirit's contributions to retirement funds will be fully restored by July 1, 2029.
“Spirit pilots also negotiated enforceable bankruptcy protections limiting the company's ability to return for additional relief and secured a $278 million unsecured bankruptcy claim, providing direct financial stake in Spirit's successful emergence from bankruptcy,” ALPA said.
ALPA revealed last week that Spirit would be scrapping its plans to furlough 365 pilots and trim its downgrades of 170 captains down to just 25 in the first quarter of next year.
The decision came after discussions between ALPA and Spirit, with the union informing the airline that several staff resignations from Spirit following the restructuring announcement had rendered a furlough spree unnecessary.
The airline also agreed to cut its fleet in half as part of its restructuring plan.