Spirit Airlines prepares for bankruptcy amid failed frontier merger and revenue decline

Spirit Airlines is gearing up to file for Chapter 11 bankruptcy after merger talks with Frontier Airlines fell through

Florida-based Spirit Airlines is reportedly preparing for Chapter 11 bankruptcy after failed merger discussions with Frontier Airlines, according to sources familiar with the matter.

The budget airline has seen its stock plummet by nearly 80% this year, with a $61 million drop in revenue compared to last year due to decreased fees and rising expenses. Discussions are ongoing with bondholders to establish a bankruptcy restructuring plan, which could lead to the cancellation of Spirit's existing equity if agreed upon.

Spirit has been a key player in the ultra-low-cost airline market, serving destinations across the U.S., Central and South America, and the Caribbean. However, the airline has faced financial strain in recent months, including the sale of 23 planes for $519 million and pilot furloughs to reduce costs. Frontier and Spirit initially aimed to merge in 2022, but a higher offer from JetBlue Airlines, later blocked by federal courts, disrupted the plans, leaving Spirit’s financial future uncertain.