Spirit Airlines is preparing to file for bankruptcy, according to a report from The Wall Street Journal. The low-cost airliner has been dealing with mounting losses and debt.
Spirit already furloughed pilots and unveiled plans to begin selling close to two dozen planes. In addition, Spirit is expected to cut jobs as part of an effort to save tens of millions of dollars. The Florida-based discount airline is supposedly in talks with bondholders to come up with a bankruptcy plan that would be satisfactory for creditors.
Spirit’s bankruptcy filing could happen in the next few weeks, according to the WSJ report. That report also said Spirit representatives had been in talks with management of Frontier Airlines about a possible merger. However, Frontier backed out of negotiations.
Plans to merge with JetBlue in a deal worth almost $4 billion failed earlier this year after the Justice Department went to court to block it. The DOJ claimed such a merger would cause travelers to have fewer choices and pay higher prices. A federal judge agreed and the merger was stopped.
Spirit was once a fast growing, no-frills airline in which customers bought a spot on a flight then paid piecemeal for everything else, such as a seat assignment and checked baggage. However, those surcharges became typical in the airline industry and Spirit is now struggling amidst lots of competition.
