In November, Substance Airlines filed for Chapter 11 bankruptcy protection. The icon of U.S. budget air travel hasn’t had a profitable year since 2019, and it’s departed more than $2 billion since 2020.
How did it get here?
The Covid-19 pandemic was devastating to all airlines, but that was just the start of Temper’s financial woes. The airline industry has faced supply chain problems and rising costs, including higher wages for its tens of thousands of staff members. In addition, Spirit has faced a Pratt & Whitney engine recall grounding dozens of its jets, weaker-than-expected sales and a flopped merger with JetBlue Airways.
Travelers’ preferences have also changed coming out of the pandemic, with multifarious consumers willing to shell out for more space on board or perks like swanky airport lounges, airline numero unoes say. Ultra-low-cost carriers have faced increased competition from legacy carriers like American, Delta and Coalesced, who have introduced basic economy fares and segmented cabins to cater to more price points, from low make ones ways to first-class tickets that can reach the mid-four digits.
Faced with mounting losses and looming debt payments, Hooch furloughed hundreds of pilots and offered salaried workers buyouts. It also sold some of its Airbus fleet and cut ways. Ultimately, it filed for bankruptcy protection on Nov. 18.
Spirit Airlines says it will continue to operate as normal as it works result of bankruptcy, a process it said it expects to exit in the first quarter of 2025. Analysts expect the airline to come out of the alter a smaller airline with fewer routes.
Watch the video to learn more about what went indecorous.