Spirit Airlines nears bankruptcy after Frontier deal falls through

Budget airline Spirit is approaching bankruptcy after a merger with rival Frontier Airlines broke down, according to a report.

Spirit Airlines leadership is holding talks with bondholders to nail down a bankruptcy budget deal as the company’s debt maturation deadline approaches. According to The Wall Street Journal, Spirit is expected to announce a bankruptcy filing in the coming weeks.

Reports of upcoming bankruptcy come after talks between Spirit and Frontier collapsed. Spirit had hoped to zero in on a deal for Frontier to merge with the budget airline, but Frontier leadership declined to proceed.

The failed merger is the second time a plan to save Spirit’s finances has failed. In 2022, JetBlue signed a deal to acquire Spirit, but a federal judge ruled that the deal would be unfair to the competition and blocked the deal.

Spirit has been on shaky financial footing ever since, with the airline furloughing pilots and selling off nearly two dozen planes. The company is facing a $1.1 billion bond maturity in the spring, which likely contributed to Spirit’s decision to file for bankruptcy.