Regulators turned down the JetBlue-Spirit Airlines merger and now Spirit is reportedly looking at a bankruptcy filing as it struggles with a $3.3 billion debt load.
The Wall Street Journal reported today that Spirit Airlines has been meeting with its creditors to arrange a Chapter 11 filing that would let it restructure its debt while it continues operations.
Spirit has been dealing with declining revenue and falling share prices. It hasn't turned a profit since the Covid-19 pandemic and, like other budget carriers, has been hurt by legacy carriers getting more skillful at squeezing more revenue out of each and every seat.
Spirit has been shrinking itself, cutting personnel and routes and reportedly plans to cut another 20% in the next few months.
The merger with JetBlue failed to gain altitude after the Justice Department argued that it would reduce competition and raise fares.