Spirit Airlines is reportedly nearing a bankruptcy filing due to financial difficulties. The airline has faced numerous challenges, including a failed merger with JetBlue and increased competition in the market, which have weakened its financial standing.
According to The Wall Street Journal (WSJ), Spirit Airlines is on the verge of seeking bankruptcy protection. Recent talks with Frontier Airlines about a potential merger have reportedly collapsed, leaving Spirit with limited options other than bankruptcy. WSJ indicates that Spirit is in advanced discussions with bondholders to create a bankruptcy plan that satisfies creditors.
The airline's financial troubles are reflected in its share performance. Reuters reported that Spirit's shares fell by nearly 40% after trading began, marking an 80% decline this year. In the second quarter, Spirit reported a net loss of approximately $158 million and announced plans to furlough hundreds of pilots to conserve cash.