Business
Spirit Airlines is in deal talks with investment firm Castlelake as struggling carrier seeks path forward
A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
Kevin Carter | Getty Images News | Getty Images
Spirit Airlines is in talks with alternative investment firm Castlelake for a potential takeover as the discount airline looks for a path out of bankruptcy, CNBC has learned.
Spirit filed for Chapter 11 bankruptcy protection last August for the second time in a year after its previous turnaround plan fell flat.
Fellow budget carrier Frontier Airlines had been in talks with Spirit over the years for a potential merger, including in recent months, but didn’t secure a deal, according to people familiar with the matter, who requested anonymity to speak about the discussions. The two had reached a deal four years ago but it was called off after a surprise all-cash offer from JetBlue Airways.
Spirit and Castlelake didn’t immediately respond to requests for comment.
It was not immediately clear if Spirit’s bondholders and Castlelake would reach a deal or what form it could take. Minneapolis-based Castlelake has been active for years in aviation finance. In August, it announced it was launching a new aviation lending arm, Merit AirFinance, with $1.8 billion in deployable capital.
Spirit in mid-December said it amended its agreement with creditors to receive another $50 million in funding immediately, a lifeline for the carrier. Further funding would be contingent on “further progress on a standalone plan of reorganization or a strategic transaction,” Spirit said Dec. 15. “Spirit is currently in active negotiations on each of these possibilities,” the company added.
In its fight for survival, Spirit has slashed flights, reduced its fleet and cut jobs to save money. Unions last year agreed to pay cuts for the carrier’s pilots and flight attendants. That amounted to $100 million in concessions, the Air Line Pilots Association said in a Jan. 13 open letter, urging bondholders to support Spirit’s restructuring and avoid a liquidation.
Dania Beach, Florida-based Spirit for years enjoyed largely steady profitability and enviable margins in the often-rocky airline industry. But things took a turn after the pandemic, when wages and other costs soared, customer preferences changed, and an oversupply of domestic flights drove down airfare. That was especially punishing for U.S.-focused carriers that don’t enjoy a buffer from plush first-class cabins and large credit card and loyalty program deals.
The carrier’s problems snowballed after a Pratt & Whitney engine recall grounded dozens of its Airbus aircraft starting in 2023 and the planned acquisition by JetBlue was blocked two years ago by a federal judge who ruled it was anticompetitive, leaving both carriers to fend for themselves against a backdrop where larger carriers dominate.
Spirit has been trying in recent years to win over higher-spending customers by offering roomier seats or bundled fares that include seat assignments and baggage, or allow for changes, to better compete with larger rivals whose profits have been buoyed big-spending customers post-pandemic.
Business
India–US trade talks: Vaishnaw sees Donald Trump’s optimism as ‘encouraging’; says India ‘deeply engaged’ – The Times of India
India remains deeply engaged on global trade issues, Union minister Ashwini Vaishnaw said on Thursday signalling confidence after US President Donald Trump expressed optimism about trade deal with New Delhi.Vaishnaw, who is in Davos for the World Economic Forum (WEF) Annual Meeting, said Trump’s comment is very encouraging. “Given India’s position and deep engagement on trade matters, it is very encouraging,” Vaishnaw told PTI when asked about the US president’s remarks.Trump, speaking at Davos a day earlier, said the United States would have a “good” trade deal with India and praised Prime Minister Narendra Modi, describing him as a ‘close friend’.“I have great respect for your Prime Minister. He’s a fantastic man and a friend of mine. We are going to have a good deal,” Trump said.Vaishnaw is leading a high-level Indian delegation to the WEF meeting, which includes Union ministers, chief ministers and senior state ministers. The Indian presence at Davos also features more than 100 CEOs, reflecting India’s push to engage global investors and policymakers amid shifting trade dynamics.Trump’s comments had come at a time when trade negotiations and tariff policies have taken centre stage globally, with several economies reassessing bilateral and multilateral trade arrangements.
Business
‘Indian aviation may lose Rs 18,000 cr this fiscal, up from Rs 5600 in FY25:’ ICRA – The Times of India
NEW DELHI: Credit rating agency ICRA has projected a sharp rise in India aviation industry’s losses to Rs 17,000-18,000 crore in FY2026, compared to Rs 5,600 crore in FY2025, due to multiple factors like slowing domestic traffic growth, increase in jet fuel prices and the depreciating rupee. Additionally, 133 aircraft of Indian carriers — representing 15-17% of the total capacity — are grounded for a number of reasons that puts supply side pressure too.Calendar year 2025 is seen as one of the worst years for Indian aviation due to the tragic AI 171 Ahmedabad crash, IndiGo schedule collapse, Delhi ATC software issue and many other events.“The Indian aviation sector is under sustained financial and operational pressure, with growth momentum moderating and industry losses widening…. due to operational disruptions, elevated forex losses, higher cost structures and slowing passenger traffic growth,” ICRA said.Domestic air passenger traffic in December 2025 declined by 3.9% YoY to 143.4 lakh passengers, and fell 5.9% sequentially from November 2025. For the full year, ICRA now expects FY2026 domestic air passenger traffic growth of just 0–3%, reaching 165–170 million, revised downward from earlier estimates of 4–6%. International traffic remains relatively resilient.
“Domestic capacity deployment in Dec 2025 declined by 7.3% YoY and 7.6% MoM, with around 91,769 departures, largely due to large-scale operational disruptions at IndiGo, including around 4,500 flight cancellations in early December 2025.”“Aviation turbine fuel (ATF) continues to be a major cost variable. In January 2026, ATF prices were 2.2% higher YoY, but 7.2% lower sequentially. For FY2025, average ATF prices stood at ₹95,181/KL, down 8.0% YoY. Fuel costs account for 30–40% of airlines’ operating expenses, while 35–50% of total operating costs are dollar-denominated, exposing airlines to exchange rate volatility.”“The continued weakening of the rupee against the USD in FY2026 has resulted in significant foreign exchange losses, with further pressure expected in Q3 FY2026. The industry’s interest coverage ratio is projected at 0.7–0.9 times in FY2026, reflecting stressed financial sustainability.”
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IndiGo posted a 77.5 percent profit drop in Q3 FY26 due to new labour laws and December disruptions, but revenue rose 6 percent.
Looking ahead, the airline expects capacity (ASK) to grow around 10 percent in Q4 FY26.
IndiGo Share Price: InterGlobe Aviation, which operates IndiGo airline, reported a sharp drop in profits for the October–December quarter of FY26, largely due to one-time costs linked to new labour laws and a major operational breakdown in December.
The airline posted a consolidated net profit of Rs 549.8 crore in Q3 FY26, down 77.5 percent from Rs 2,448.8 crore recorded in the same quarter last year. Excluding exceptional items totalling Rs 1,546.5 crore, profit would have come in at Rs 2,096.3 crore, still reflecting a 14 percent year-on-year decline.
Revenue growth holds up despite disruption
Even as profits took a hit, IndiGo managed to grow its topline. Revenue from operations rose 6 percent YoY to Rs 23,471.9 crore, supported by higher capacity deployment. The airline continues to dominate India’s aviation market with close to two-thirds share.
During the quarter, capacity expanded 11.2 percent YoY, while passenger numbers increased 2.8 percent. However, operational stress showed up in performance metrics. The load factor slipped by 2.4 basis points to 84.6 percent, and yield declined 1.8 percent to Rs 5.33. Fuel cost per available seat kilometre (CASK) eased 2.8 percent to Rs 1.53, even as overall costs rose nearly 10 percent, with fuel expenses up 8 percent.
Labour codes trigger major one-time hit
A significant part of the earnings impact came from India’s newly implemented labour laws, which became effective on November 21. These rules mandate a standard definition of wages, including a requirement that basic pay account for at least 50 percent of total CTC, limiting the use of allowances to reduce statutory payouts.
As a result, IndiGo recorded a one-time exceptional loss of Rs 969.3 crore linked to the labour code transition.
December operational crisis adds pressure
The airline was also hit by severe disruption in early December, when large-scale flight cancellations and delays created chaos at major airports. The issue was driven mainly by crew shortages, especially pilots, following the rollout of revised Flight Duty Time Limitation (FDTL) norms, which require longer rest periods.
Industry estimates suggest the disruption affected over 3 lakh passengers. IndiGo booked a one-time loss of Rs 577.2 crore related to the crisis.
Regulator DGCA later imposed a Rs 22 crore penalty after the airline cancelled 2,507 flights and delayed 1,852 flights between December 3 and 5.
Operational metrics and outlook
For the quarter, IndiGo reported technical dispatch reliability of 99.9 percent. On-time performance at six major metros stood at 76.6 percent, while the cancellation rate was 1.03 percent.
Looking ahead, the airline expects capacity (ASK) to grow around 10 percent in Q4 FY26.
What the CEO said
Commenting on the quarter, IndiGo CEO Pieter Elbers acknowledged the operational challenges faced in December.
He said the airline regretted the inconvenience caused to passengers during the disruption period and thanked customers for their patience. Elbers also credited IndiGo employees for stabilising operations quickly and thanked government bodies and aviation authorities for their support.
Despite the setbacks, he noted that the airline served nearly 32 million passengers in the quarter and around 124 million passengers in calendar year 2025, adding that IndiGo’s long-term fundamentals remain strong, supported by fleet expansion and a growing domestic and international network.
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January 22, 2026, 18:37 IST
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