Spirit Airlines eyes bankruptcy as Frontier talks fail: report

SPIRIT Airlines is preparing to file for bankruptcy protection after merger talks with Frontier Group Holdings broke down, The Wall Street Journal reported.

The budget air carrier is in advanced discussions with bondholders to hammer out a bankruptcy plan that would have support from a majority of creditors, as it struggles with mounting losses and looming debt maturities, The Wall Street Journal said on Tuesday (Nov 12), citing sources with knowledge of the matter.

A bankruptcy filing could happen within weeks, it added. Spirit’s shares fell as much as 47 per cent in extended trading.

A spokesperson for Spirit did not immediately comment to Bloomberg on the report, while a representative for Frontier declined to comment.

Spirit had held talks with Frontier about filing for bankruptcy to facilitate a takeover by the rival discount carrier, Bloomberg reported last month.

An attempt to sell Spirit via Chapter 11 would likely need the advanced approval of the airline’s creditors in order to fast-track the process so that it can emerge without pausing operations or burning through the rest of its dwindling cash. Early-stage discussions between the air carriers involved working out terms that holders of Spirit’s roughly US$2.5 billion of debt would agree to. BLOOMBERG