Scott Kirby, CEO of United Airlines, commented on Spirit Airlines’ plan of reorganization in the quote below. In short, Kirby appears to think that Spirit’s plan is a road to nowhere, except Chapter 7 liquidation. While he isn’t exactly an objective observer, he doesn’t appear to be wrong either, as Spirit’s demise will inure—at least partially—to United’s benefit in the zero-sum game of commercial aviation. 

Spirit’s plan appears to swap some debt for equity and put enough cash on the balance sheet to stay afloat for a few quarters, but the plan fails to address the underlying causes of the insolvency. Then what? Chapter 22?

While liquidation may be a possibility, I suspect that Spirit will be sold to a competitor shortly after its emergence from bankruptcy protection. Unfortunately, current shareholders will get nothing, and that windfall will go to the creditors sponsoring the plan of reorganization.

I think the current business plan is not going to work and, if they pursue it, Chapter 11 will be a brief pit stop on the way to Chapter 7,” Scott Kirby, CEO of United Airlines, said at an event at Washington’s Dulles International Airport on Thursday. (Chapter 7 is the section of the U.S. bankruptcy code where a company shuts down and liquidates its assets.)

https://www.msn.com/en-us/money/companies/united-ceo-thinks-spirit-will-liquidate-assets-following-bankruptcy-what-that-could-mean-for-travelers/ar-AA1vdzln