Spirit Airlines is in advanced talks over a possible bankruptcy filing following a failed merger and continued financial struggles, according to a report from The Wall Street Journal.
Driving the news: The failed merger with Frontier Airlines, another low-cost airline, led to the exploration of bankruptcy filing as a means of restructuring debt and other liabilities.
- To address its financial challenges, Spirit has begun cutting jobs and selling off some jets to save the company an estimated 80 million dollars.
- Despite the easing of the COVID-19 pandemic and travel rebound, Spirit failed to return to profitability due to rising operational costs and increased competition.
What we’re watching: The potential bankruptcy news has caused Spirit Airlines’ shares to plummet by over 60%, and the stock is down by 80% over the last year.
