Major airline ‘to file for bankruptcy’

Spirit Airlines is reportedly planning to file for bankruptcy after a merger deal with Frontier Airlines fell through (Picture: Getty Images)

A US-based airline is reportedly preparing to file for bankruptcy, spurring fears of travel chaos as the holidays approach.

Spirit Airlines is in advanced talks with bondholders and could file for bankruptcy protection within weeks, sources told The Wall Street Journal on Tuesday.

The apparent bankruptcy plan comes after talks to merge with another ultra low-cost carrier, Frontier Airlines, fell through.

Dania Beach, Florida-based Spirit was also speaking with Frontier to possibly restart conversations on merging, but sources told the newspaper that the latter decided against going in that direction in the near future.

Spirit Airlines tried to merge with Frontier Airlines in 2022 (Picture: Getty Images)

Spirit and Frontier were moving towards a merger in 2022, but JetBlue gave a higher offer and Spirit’s investors were convinced.

However, a federal judge in January blocked JetBlue’s $3.8billion acquisition of Spirit on the grounds that it would hurt competition.

Earlier this year, Spirit furloughed pilots and halted growth initiatives. In October, the airline sold 23 of its planes to GA Telesis for $519million.

Spirit became popular among budget travelers because it offers generally lower fares, which allow customers to pay extra for bags other than a personal item, choosing a seat, all beverages and snacks, WiFi and other amenities instead of including them in the overall ticket price.

Spirit Airlines shares fell on Tuesday after reports of its plans to file for bankruptcy (Picture: Getty Images)

Shares for Spirit fell 39% to $1.8 on Tuesday. The company’s stock has tumbled almost 80% this year, a departure from the S&P passenger airlines index which climbed 52%.

The bankruptcy report came a day after a Spirit plane was struck by gang gunfire while trying to land in Port-au-Prince, Haiti. A flight attendant was injured as the plane diverted to the Dominican Republic.

Following the incident and other similar attacks, the Federal Aviation Administration on Tuesday prohibited all US airlines from flying in and out of Haiti for 30 days, as unrest continues despite newly installed Haitian Prime Minister Alix Didier Fils-Aime vowing to improve security.

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