Spirit Airlines said Monday that it has filed for bankruptcy protection and will attempt to reboot as it struggles to recover from the pandemic-caused swoon in travel, stiffer competition from bigger carriers, and a failed attempt to sell the airline to JetBlue.

Spirit, the biggest U.S. budget airline, filed a Chapter 11 bankruptcy petition after working out terms with bondholders. The airline has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.

The airline said it expects to continue operating normally during the bankruptcy process. Spirit told customers Monday they can book flights and use frequent-flyer points as they ordinarily would, and said employees and vendors would continue getting paid.

The airline said it received commitments for a $350 million equity investment from existing bondholders and will convert $795 million of their debt into stock in the restructured company. The bondholders will also extend a $300 million loan that, combined with Spirit’s remaining cash, will help the airline get through the restructuring.

CEO Ted Christie confirmed in August that Spirit was talking to advisers of its bondholders about the upcoming debt maturities. He called the discussions a priority, and said the airline was trying to get the best deal it could as quickly as possible.

People are still flying on Spirit Airlines. They’re just not paying as much.

In the first six months of this year, Spirit passengers flew 2% more than they did in the same period last year. However, they are paying 10% less per mile, and revenue per mile from fares is down nearly 20%, contributing to Spirit’s red ink.

It’s not a new trend. Spirit failed to return to profitability when the coronavirus pandemic eased and travel rebounded. There are several reasons behind the slump.

Spirit’s costs, especially for labor, have risen.

In a highly unusual move, Spirit planned to cut its October-through-December schedule by nearly 20%, compared with the same period last year, which analysts said should help prop up fares. But that would help rivals more than it would boost Spirit.

— New York Times

News wire AP to cut 8% through buyouts

The Associated Press said Monday that it was cutting its staff by 8% as part of a plan to adapt to fast-changing conditions in the media industry.

The news organization said the cuts, which would be done through buyouts, were part of a plan to meet “the evolving needs of our customers.” The cuts will affect both news and business employees.

In a note to employees Monday, the AP News Guild said the cuts were the result of revenue declines and would affect the organization’s global bureaus and administrative staff. The note said as many as 121 employees would be eligible for a buyout package, adding that managers said the buyouts aimed to avoid layoffs.

The Associated Press — a news cooperative that licenses its content to member organizations — has come under financial pressure over the past year as some news organizations have abandoned the service.

Amazon, SpaceX challenge NLRB

Attorneys for Amazon and Elon Musk’s SpaceX argued in a federal appeals court Monday that the National Labor Relations Board’s structure is unconstitutional, advancing a legal fight that may last into the Trump administration where Musk is expected to oversee bureaucratic cost-cutting.

A panel of three judges at the 5th U.S. Circuit Court of Appeals in New Orleans heard separate oral arguments in the SpaceX and Amazon lawsuits, which the two companies initiated after the labor agency filed complaints against them in disputes about workers’ rights and union organizing.

A ruling in favor of the companies could immensely diminish — or paralyze — the nearly century-old agency, which is tasked with enforcing labor laws and settling labor-related complaints workers lodge against their employers.

A lawyer for the NLRB emphasized during the hearing that both companies filed their appeals after lower courts did not give rulings by requested deadlines.

— From news services