With no profit to show since Covid, Spirit Airlines is discussing a possible restructuring in preparation for declaring bankruptcy, according to a report in The Wall Street Journal.

Citing “people who are familiar with the matter,” The Journal said Spirit has been talking bankruptcy since its failed merger with JetBlue Airways. The airline is struggling to compete with the big carriers, and was hard-hit when a recall of turbofan engines grounded many of its planes, including many that were supposed to fly to the new airport in Tulum, Mexico. Last month it furloughed 186 pilots.

As part of its efforts to enhance the bottom line, Spirit has been cutting flights and making changes to the services it offers. This summer it rolled out a premium “Go Big” fare class that offers a larger seat and early boarding, lifted its checked baggage limit from 40 to 50 pounds, and did away with change and cancelation fees.  Just this week it suspended nonstop service between Cleveland and Orlando, effective Nov. 5.

And still, it reported its 11th consecutive quarterly loss in August.

Citing the fallout from Covid-19, cruise operator Hornblower has filed for bankruptcy, and its American Queen subsidiary has ceased operations.

Private-equity firm Strategic Value Partners has agreed to acquire majority ownership of Hornblower and “provide a significant equity investment in the business,” but the deal will require approval from the US Bankruptcy Court in Houston, the Wall Street Journal reported. Private-equity firm Crestview Partners will retain a minority interest and become the sole owner of Journey Beyond, the leading experiential travel provider in Australia.

Hornblower said in a statement that American Queen Voyages hopefully will be sold; if no buyer is found its operations will be wound down.

Hornblower also provides ferry services to the Statue of Liberty and the Ellis National Museum of Immigration in New York, and to Alcatraz Island in San Francisco. Those services will continue operations.

Guests who have booked an American Queen Voyages cruise should visit the line’s dedicated refund website to submit a claim form and begin the refund process, or call (888) 202-5784.

Hornblower said it expects to move through the bankruptcy process quickly and emerge from Chapter 11 in about four months. It has a commitment for $300 million in financing from Deutsche Bank, $121 million in new-money financing from SVP-managed funds and Crestview.

“The steps we are taking today will enable us to address AQV and strengthen our financial foundation as we continue serving our guests and commuters around the world. With the support of our financial stakeholders, we will continue to advance our business initiatives and drive growth. We thank the entire Hornblower team for their hard work and dedication, as well as our vendors and partners across our businesses for their continued support,” said Hornblower Group CEO Kevin Rabbitt.

In a statement on Tuesday, Scandinavian airline SAS announced it was filing for voluntary Chapter 11 bankruptcy in the United States. SAS is the national airline of Denmark, Norway, and Sweden. The SAS pilot’s union called for a strike on Monday, apparently precipitating the bankruptcy filing. Read the rest of this entry »

After hundreds of Hertz rental car customers came forward with allegations of being falsely arrested, Senators are calling for an investigation into the company. Customers have reported that they were detained and handcuffed after Hertz employees accused them of stealing their cars.

Sen. Richard Blumenthal, D-Conn., who chairs the Senate’s Consumer Protection Subcommittee,  said in a statement that the allegations against Hertz are “troubling” and “raise serious concerns about Hertz’s business practices.”

The senator also requests details on Hertz’s stolen vehicle reporting protocols and procedures and prompt action by Hertz to compensate consumers who have been wrongfully arrested and have suffered long-term consequences.

Senator Blumenthal also wrote a letter to Stephen Scherr, CEO of Hertz Global Holdings Inc. saying, “I write to express serious alarm over reports suggesting that Hertz has, for years, wrongly reported customers to law enforcement for vehicle theft.”

Senator Elizabeth Warren, D-Mass., wrote to the White House Competition Council last week, requesting that it investigate whether rental vehicle sector concentration has resulted in higher costs and poor customer service.

“Disturbing pattern (that) has resulted in unpleasant experiences, job losses, and even jail time for clients,” Warren said. “I am concerned that Hertz’s conduct may be part of a larger pattern of anticompetitive and abusive behavior by the company.”

Customers have reported that they were detained and handcuffed after Hertz employees accused them of stealing their cars.  More than 220 Hertz customers have indicated Hertz has charged them with theft of rental cars.

Hertz responded to the allegations in a statement, indicating, “Hertz takes these allegations very seriously. We are currently investigating these claims and will take appropriate action based on the findings of our investigation.”

“The great majority of these incidents involve renters who were weeks or months late returning vehicles and who stopped interacting with us long past the planned due date,” Hertz said in the statement.

After a CBS News investigation, a bankruptcy court in Delaware required Hertz to make documents relating to the allegations public.