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Despite its troubles following its failed merger with JetBlue Airways, Spirit Airlines sees a path forward. CEO Ted Christie told attendees at the carrier’s annual shareholders meeting that the company is not considering a Chapter 11 bankruptcy, CNBC reports, as many investors have feared and some debt holders have been preparing for.
JetBlue and Spirit formally called off their $3.8 billion tie-up in March, after the Justice Department sued to block the merger on antitrust grounds and a federal judge agreed with the government’s request.
S&P cut Spirit’s credit rating to CCC from CCC+ on Wednesday, suggesting that money-saving moves like deferring a windfall because of delays in engine part deliveries will not be enough to keep the airline from having to make some major changes.
“In our view, recent events indicate a rising probability of a restructuring that we consider tantamount to a distressed exchange in the next 12 months,” the ratings agency said in a report explaining its reasoning for the downgrade.
Spirit stock was flat in Friday trading. It is down 77% for the year.