Investing.com — Bankrupt discount carrier asked a U.S. bankruptcy court on Monday for approval to pay $10.7 million in retention bonuses to remaining employees as it winds down operations after ceasing flights on Saturday.
The airline is seeking to pay retention bonuses averaging $76,000 per participant to employees who stay on during the shutdown. Spirit will also pay additional amounts to its top three executives, though the specific figures have not been disclosed.
Chief Financial Officer Fred Comer stated in a court filing that the company has no viable paths remaining for restructuring or continued operations. He said Spirit fought for months to reorganize and nearly succeeded but was left with no alternative to an orderly wind-down.
The payments to the top three executives will replace compensation Spirit would have offered under annual incentive and cash incentive plans that existed before the bankruptcy.
Spirit said it lacks funds to conduct an organized auction of its aircraft, engines and other equipment. The airline is asking the court for permission to conduct fast sales or to abandon assets and allow lenders to repossess them.
The carrier had been in advanced talks with the Trump administration over a $500 million government bailout that would have helped it exit bankruptcy and granted the government up to 90% of Spirit’s equity. Those talks collapsed after some creditors objected.
Spirit was already struggling to turn a profit before facing $100 million in additional fuel costs since March 1. The airline cited surging jet fuel prices following U.S.-Israeli strikes on Iran that disrupted traffic through the Strait of Hormuz.
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