The Wall Street Journal, citing sources familiar with the subject, reports that Spirit Airlines is preparing to file for bankruptcy after merger talks with Frontier Airlines fell apart.
According to the report, the ultra-low-cost carrier is in early talks with bondholders to develop a bankruptcy plan that will be supported by the majority of creditors.
According to the report, Spirit plans to file for bankruptcy within the next few weeks.
A Reuters request for comment was not immediately returned by the firm.
Despite strong travel demand, the carrier is losing money.
It has failed to report a profit in five of the last six quarters, increasing concerns about its ability to handle impending debt obligations. Last month, Spirit said it would furlough about 330 pilots on Jan. 31 to cut costs and shore up its finances.
