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An eleventh-hour reprieve from creditors allowed Spirit Airlines to secure $50 million and avoid a sudden shutdown that The Air Current reported several competitors were preparing for as soon as this past weekend with the arrival of a key milestone as part of its ongoing bankruptcy reorganization.
The Dec. 13 financing milestone was closely-watched by other U.S. airlines and Spirit stakeholders. Two of the carrier’s direct competitors — who have much to gain from its demise — were accelerating internal preparations for the possibility Spirit would not be able to tap the latest tranche of financing, which would have made it hard to continue its operations.
The lenders of the carrier’s up to $475 million debtor-in-possession (DIP) credit agreement agreed to make half of a $100 million third draw scheduled for Saturday available to Spirit on Monday, the airline said.
The financing infusion for Spirit comes amid broader upheaval in the low-cost airline segment of U.S. air transport. Frontier Airlines on Monday afternoon announced Barry Biffle was no longer the company’s chief executive, an abrupt dismissal which will see the company’s president Jimmy Dempsy appointed as interim CEO.
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