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 that they can book flights and use frequent-flyer points as they ordinarily would, and it said it will continue to pay employees and vendors.
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.
Shares of Miramar, Florida-based Spirit dropped 25% on Friday, after The Wall Street Journal reported that the airline was discussing terms of a possible bankruptcy filing with its bondholders. The company missed a deadline for filing its third-quarter financial results, but announced that its operating margin would indicate a bigger loss than the company suffered in the same quarter last year.
Those were just the latest in a series of blows that have sent the stock crashing down by 97% since late 2018 — when Spirit was still making money.
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. The biggest U.S. airlines have snagged some of Spirit’s budget-conscious customers by offering their own brand of bare-bones tickets. And fares for U.S. leisure travel — Spirit’s core business — sagged this summer because of a glut of new flights.
The premium end of the air-travel market has surged while Spirit’s traditional no-frills end has stagnated. So this summer, Spirit decided to sell bundled fares that include a bigger seat, priority boarding, free bags, internet service and snacks and drinks. It also dropped cancellation fees after rival Frontier Airlines did so.
Those are huge changes from Spirit’s longtime strategy of luring customers with rock-bottom fares and forcing them to pay extra for things such as bringing a carry-on bag or ordering a soda.
In a highly unusual move, Spirit plans 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 will help rivals more than it will boost Spirit. Analysts from Deutsche Bank and Raymond James say that Frontier, JetBlue and Southwest would benefit the most because of their overlap with Spirit on many routes.
Spirit has also been plagued by required repairs to Pratt & Whitney engines, which is forcing the airline to ground dozens of its Airbus jets. Spirit has cited the recall as it furloughed pilots.
The aircraft fleet is relatively young, which has made Spirit an attractive takeover target.
Frontier tried to merge with Spirit in 2022 but was outbid by JetBlue. However, the Justice Department sued to block the $3.8 billion deal, saying it would drive up prices for Spirit customers who depend on low fares, and a federal judge agreed in January. JetBlue and Spirit dropped their merger two months later.
U.S. airline bankruptcies were common in the 1990s and 2000s, as airlines struggled with fierce competition, high labor costs and sudden spikes in the price of jet fuel. PanAm, TWA, Northwest, Continental, United and Delta were swept up. Some liquidated, while others used favorable laws to renegotiate debts such as aircraft leases and keep flying.
The last bankruptcy by a major U.S. carrier ended when American Airlines emerged from Chapter 11 protection and simultaneously merged with US Airways in December 2013.
FILE - Passengers wait in a line for help at the Spirit Airlines ticket counter at the Tampa International Airport Thursday, June 1, 2023, in Tampa, Fla. (AP Photo/Chris O'Meara, File)
FILE - A Spirit Airlines 319 Airbus approaches Manchester Boston Regional Airport for a landing, Friday, June 2, 2023, in Manchester, N.H. (AP Photo/Charles Krupa, File)
ISANTI, Minn. (AP) — The young Buddhist lama sat on a throne near an altar decorated with flowers, fruits and golden statues of the Buddha, watching the celebrations of his 18th birthday in silence, with a faint smile.
Jalue Dorje knew it would be the last big party before he joins a monastery in the Himalayan foothills -- thousands of miles from his home in a Minneapolis suburb, where he grew up like a typical American teen playing football and listening to rap music.
But this was not an ordinary coming-of-age celebration. It was an enthronement ceremony for an aspiring spiritual leader who from an early age was recognized by the Dalai Lama and other Tibetan Buddhist leaders as a reincarnated lama.
From the stage, he saw it all: The young women in white long bearded masks who danced, jumping acrobatically and twirling colorful sticks to wish him luck in a tradition reserved for dignitaries. The banging of drums. The procession of hundreds – from children to elderly -- who lined up to bow to him and present him with a “khata” -- the white Tibetan ceremonial scarves that symbolize auspiciousness.
From a throne reserved for lamas, he smelled the aroma of Tibetan dishes prepared by his mother over sleepless nights. He heard the monks with shaved heads, in maroon and gold robes like his own, chant sacred mantras. Behind them, his shaggy-haired high school football teammates sang “Happy Birthday” before he cut the first slice of cake.
One of his buddies gave him shaker bottles for hydrating during training at the gym; another, a gift card to eat at Chipotle Mexican Grill.
“I was in awe!” Dorje recalled later. “Usually, I’d be at the monk section looking up to whomever was celebrating. But that night it was for me.”
Since the Dalai Lama’s recognition, Dorje has spent much of his life training to become a monk, memorizing sacred scriptures, practicing calligraphy and learning the teachings of Buddha.
After graduation in 2025, he’ll head to northern India to join the Mindrolling Monastery, more than 7,200 miles (11,500 kilometers) from his home in Columbia Heights.
Following several years of contemplation and ascetism, he hopes to return to America to teach in the Minnesota Buddhist community. His goal is “to become a leader of peace,” following the example of the Dalai Lama, Nelson Mandela and Gandhi
“There’s going to be a lot of sacrifice involved,” Dorje said. But he’s not new to sacrifices.
He remembered all the early mornings reciting ancient prayers and memorizing Buddhist scriptures, often rewarded by his dad with Pokémon cards.
“As a child, even on the weekend, you’re like: ‘Why don’t I get to sleep more? Why can’t I get up and watch cartoons like other kids.’ But my dad always told me that it’s like planting a seed,” he said, “and one day it’s going to sprout.”
It all began with the process of identifying a lama, which is based on spiritual signs and visions. Dorje was about 4 months old when he was identified by Kyabje Trulshik Rinpoche, a venerated master of Tibetan Buddhism and leader of the Nyingma lineage. He was later confirmed by several lamas as the eighth Terchen Taksham Rinpoche — the first one was born in 1655.
After the Dalai Lama recognized him at age 2, Dorje’s parents took him to meet the spiritual leader of Tibetan Buddhism when he visited Wisconsin in 2010.
The Dalai Lama cut a lock of Dorje’s hair in a ceremony and advised his parents to let their son stay in the U.S. to perfect his English before sending him to a monastery.
Dorje is fluent in English and Tibetan. He grew up reading the manga graphic novel series ″Buddha,” and is an avid sports fan. He roots for the Timberwolves in basketball, Real Madrid in soccer, and the Atlanta Falcons in football. He even keeps a rookie card of wide receiver Drake Londo pasted to the back of his phone, which he carried wrapped in his robes during his party.
On the football field, playing as a left guard, his teammates praised his positivity, often reminding them to have fun and keep losses in perspective.
“It’s someone to look up to,” said Griffin Hogg, 20, a former player who took Dorje under his wing. He said they learned from each other and credits Dorje with helping him find his spirituality. “I’m more of a relaxed person after getting to know him and understanding his own journey.”
While Dorje tries to never miss Monday Night Football, he’s always there to help with any event hosted by the local Tibetan community, one of the largest in the United States.
“He has one foot in the normal high school life. And he has one foot in this amazing Tibetan culture that we have in the state of Minnesota,” said Kate Thomas, one of his tutors and the teachings coordinator at Minneapolis’ Bodhicitta Sangha Heart of Enlightenment Institute.
“You can see that he’s comfortable playing a role of sitting on a throne, of participating and being honored as a respected person in his community, as a religious figure. And yet, as soon as he has the opportunity, he wants to go and hang out with his high school buddies,” she said. “That’s testimony to his flexibility, his openness of mind.”
For years, he has followed the same routine. He wakes up to recite sacred texts and then attends school, followed by football practice. He returns home for tutoring about Tibetan history and Buddhism. Then he might practice calligraphy or run on a treadmill while listening to BossMan Dlow, Rod Wave and other rappers.
Although he was officially enthroned in 2019 in India, an estimated 1,000 people gathered at the Tibetan American Foundation of Minnesota for his recent ceremony.
“He unites us – Jalue is always here for us,” said Zenden Ugen, 21, a family friend and neighbor who performed Tibetan dances at the event.
“I wish him the best in life because being born and not being able to choose your life must be very hard,” Ugen said. “But he has a responsibility and him being able to take on that responsibility, I’m very inspired by him. I just hope he keeps being who he is.”
Dorje's proud uncle, Tashi Lama, saw him grow up and become a Buddhist master.
“He’s somebody who’s going to be a leader, who’s going to teach compassion and peace and love and harmony among living beings,” he said about his nephew, often referred to as “Rinpoche” -- a Tibetan word that means “precious one.”
__
Associated Press video journalist Jessie Wardarski contributed to this report.
__
Associated Press religion coverage receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content.
U.S.-born Buddhist lama, Jalue Dorje, talks with his high school friends near the end of his 18th birthday and enthronement ceremony, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, shows his Drake London, Atlanta Falcons, rookie card, which sits in the back of his phone, at his 18th birthday and enthronement ceremony at the Tibetan American Foundation of Minnesota, on Saturday, Nov. 9, 2024, in Isanti, Minn. (AP Photo/Jessie Wardarski)
Young dancers in bearded masks pose for a photo before performing a dance to wish luck to U.S.-born Buddhist lama Jalue Dorje during his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Luis Andres Henao)
Kids play in a back room of the Tibetan American Foundation of Minnesota during the 18th birthday and enthronement ceremony for U.S.-born Buddhist lama, Jalue Dorje, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Guests prepare to welcome U.S.-born Buddhist lama, Jalue Dorje, during his 18th birthday and enthronement ceremony at the Tibetan American Foundation of Minnesota in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Luis Andres Henao)
High school friends present U.S.-born Buddhist lama, Jalue Dorje, with a “khata,” the Tibetan ceremonial scarves that symbolize auspiciousness, at his 18th birthday and enthronement ceremony, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
High school friends and fellow football players line up to present U.S.-born Buddhist lama, Jalue Dorje, with “khata,” the Tibetan ceremonial scarves that symbolize auspiciousness, at his 18th birthday and enthronement ceremony, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Tenzin Lhasa holds her daughter, Dawoe Tenzin Arya, while in procession to present U.S.-born Buddhist lama, Jalue Dorje, with “khata,” the Tibetan ceremonial scarves that symbolize auspiciousness, at his 18th birthday and enthronement ceremony, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Monks bow and present “khata” to teenage Buddhist lama, Jalue Dorje, at his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, is presented with “khata,” the Tibetan ceremonial scarves that symbolize auspiciousness, at his 18th birthday and enthronement ceremony, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Hundreds attend the 18th birthday and enthronement ceremony for U.S.-born Buddhist lama, Jalue Dorje, at the Tibetan American Foundation of Minnesota in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, watches a traditional Tibetan performance at his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Friends, family, and community members attend the 18th birthday and enthronement ceremony of U.S.-born Buddhist lama, Jalue Dorje, at the Tibetan American Foundation of Minnesota in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, center, calls for his dad before making an entrance at his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Elders dress in traditional clothing to perform a ceremonial Tibetan dance to welcome U.S.-born Buddhist lama, Jalue Dorje, to his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Monks and high school students attend the 18th birthday and enthronement ceremony for U.S.-born Buddhist lama, Jalue Dorje, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Guests and monks choose from a wide selection of homemade Tibetan dishes at the 18th birthday and enthronement ceremony for U.S.-born Buddhist lama, Jalue Dorje, in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Guests wait for the entrance of U.S.-born Buddhist lama, Jalue Dorje, at his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
Friends, family, and community members attend the 18th birthday and enthronement ceremony of U.S.-born Buddhist lama, Jalue Dorje, at the Tibetan American Foundation of Minnesota in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, right, waits in a private room before making an entrance at his 18th birthday and enthronement ceremony that hundreds attended in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Jessie Wardarski)
U.S.-born Buddhist lama, Jalue Dorje, right, and a member of the Minnesota Tibetan community bow and touch foreheads in a traditional Tibetan greeting at his 18th birthday and enthronement ceremony in Isanti, Minn., on Saturday, Nov. 9, 2024. (AP Photo/Luis Andres Henao)
