Spiritual Airways files for the second bankruptcy of the year with the continuing financial challenges

Written by Shevang Toyari and Rajesh Kumar Singh

(Reuters) -The leading Airlines in the field of bankruptcy protection on Friday advanced on Friday for the second year after the failure of the previous reorganization to put it in full swing.

The Florida -based transportation company, which came out of its first bankruptcy in March, is wrestling with the decrease in money and escalating losses.

In the three months until the end of June, it was reported a net loss of about $ 246 million. In the face of a cash crisis, the company said last week that it had borrowed full 275 million dollars, according to its rotating credit facilities.

The SPIRIT file, Chapter 11, was widely expected to provide a warning earlier this month that it might not continue to work if its financial results failed to improve quickly.

“Since the exit from our previous restructuring, which was targeting exclusively to reduce the debts funded by the soul and raise the capital, it has become clear that there is a lot of work that must be done and that many of the tools available for the best spirit in the future for the future.”

The company submitted Chapter 11 in the bankruptcy court in the southern province of New York. Spirit said it works as a productive with guaranteed notes holders, including with regard to potential financing that may be later necessary in the procedures.

Industry analysts and executives say the problems of spirit stems from their failure to fix the inflated cost structure in the first bankruptcy. The total operating expenses in the last quarter amounted to $ 1.2 billion, which amounted to 118 % of their quarterly revenues.

The soul is also closed in a conflict with Aircraft Delcap holdings on a deal covering 36 aircraft from Airbus due to the delivery between 2027 and 2028.

As part of its restructuring, the airline said it would reduce its presence in some markets. It will also cut her fleet to reduce her debts and lease them significantly. It is estimated that he would generate hundreds of millions of dollars in annual operating savings.

Airlines conflicts have created opportunities for competitors, as Frontier airlines add ways and looks forward to more expansion. Analysts and executives in the industry say that transport companies such as Frontier, Southwest, and UNITED Airlines may be interested in capturing spiritual and other assets during restructuring.

Spirit said that wages and benefits will continue to pay and honor them for those working in the airline, including contractors. GO-Forward will also meet its sellers and suppliers during the bankruptcy process.