Spirit Airlines (NYSE:SAVE) announced that it had filed for Chapter 11 bankruptcy protection as part of a prearranged restructuring plan designed to reduce its debt and position the company for long-term stability. Known for its low-cost carrier model, Spirit emphasized that operations would continue uninterrupted during the process.

The airline reached a Restructuring Support Agreement (RSA) with a majority of its loyalty and convertible bondholders, outlining a comprehensive plan to improve financial flexibility and enhance customer offerings. The agreement includes a $350 million equity investment backed by its bondholders, which is expected to strengthen the airline’s financial position.

As part of the plan, Spirit will execute a deleveraging transaction to convert $795 million in funded debt into equity. The airline also secured $300 million in debtor-in-possession financing from bondholders to support operations during the restructuring, supplementing its existing cash reserves and operational cash flow.

Spirit reassured passengers and employees that its flights and services would continue as normal throughout the bankruptcy process. The restructuring aims to provide a stable foundation for future growth and improve the airline’s ability to compete in the highly competitive travel industry.