Aug 12 (Reuters) - Spirit Airlines has warned
of going-concern doubts, just months after emerging from
bankruptcy as weak domestic demand and dwindling cash reserves
strain its operations.
Adverse market conditions such as elevated domestic capacity
and weak demand for leisure travel in the second quarter has
resulted in a tough pricing environment for airline, it said in
its quarterly report on Monday.
The company expects these pressures to persist through the
rest of the year, adding to operational uncertainty. Last month,
Spirit said it would furlough about 270 pilots, while demoting
another 140, to conserve cash.
The Florida-based airline, known for its bright yellow
livery, had filed for bankruptcy protection last November, after
years of losses, failed merger attempts and heavy debt.
It was the first major U.S. carrier to file for Chapter 11
since 2011. It emerged from bankruptcy in March after a court
approved restructuring backed by its creditors.
Uncertainty stemming from President Donald Trump's sweeping
tariffs and budget cuts have prompted travelers to curb
spending and reassess plans.
The airline said on Monday that its credit-card processor
has asked it to set aside more funds as collateral or risk
losing its contract, which is set to expire on Dec. 31.
To address the concerns, Spirit said it plans to bolster
liquidity by selling or monetizing aircraft and real estate and
shedding excess airport gate capacity.
Uncertainty over meeting minimum liquidity covenants and the
outcome of talks with stakeholders have raised substantial doubt
about the company's ability to continue as a going concern over
the next 12 months, it said.