BREAKINGVIEWS-Yawing US airline betrays antitrust rudder limits
Budget carrier Spirit Airlines faces financial uncertainty shortly after emerging from bankruptcy, citing doubts about its ability to continue operations due to increased flight capacity and decreased leisure travel demand. This situation follows a blocked $3.8 billion acquisition by JetBlue, contrasting with other recent corporate interventions. Spirit's challenges highlight the impact of market conditions on airline stability.
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Jonathan Guilford
NEW YORK, Aug 12 (Reuters Breakingviews) - Budget carrier Spirit is worried about cash mere months after emerging from bankruptcy. Fallout from a blocked $3.8 bln sale to rival JetBlue contrasts starkly with interventions like the one in Adobe’s deal to buy rival Figma. It’s a reminder about the importance of tailwinds.
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CONTEXT NEWS
Spirit Aviation, the reorganized successor to ultra-budget carrier Spirit Airlines, said on August 11 that there is “substantial doubt as to the company’s ability to continue as a going concern.” It cited higher domestic flight capacity and weaker demand for leisure travel.
A judge blocked JetBlue Airways from acquiring Spirit for $3.8 billion in January 2024, after the suitor had prevailed against rival Frontier in a bidding war. Frontier subsequently offered to buy Spirit, but was rebuffed. (Editing by Jeffrey Goldfarb; Production by Maya Nandhini)
