Spirit Airlines is reportedly set to file for Chapter 11 bankruptcy protection after failed merger talks with Frontier Airlines, as the carrier grapples with significant losses and upcoming debt maturities.
The airline is engaged in advanced discussions with bondholders to develop a bankruptcy plan that would gain approval from most creditors, with a formal filing expected within weeks.
Spirit Airlines has indicated ongoing negotiations to restructure its debt obligations and explore strategic alternatives in a recent SEC filing, warning that any finalized deal might lead to cancellation of existing equity, impacting current shareholders.
Preliminary estimates show a decline in Spirit’s financial performance, with operating revenue expected to fall by $61m year-on-year, largely due to reduced average yields and increased operational expenses, despite a decrease in fuel costs.
