Spirit Airlines is preparing for a possible shutdown after a rescue deal collapsed. The discount carrier is running low on cash and struggling to secure new financing.
The airline had pursued a $500 million bailout to stay afloat. However, bondholders have balked at the terms, leaving the company with few options.
Talks with the government also faltered. Spirit has faced financial pressure since a federal judge blocked its merger with JetBlue Airways earlier this year.
The airline has been losing money for several quarters. Rising operational costs and stiff competition from larger carriers have hurt its bottom line.
Spirit’s fleet is largely grounded, and it has slashed flight schedules. The company has already laid off hundreds of employees to cut costs.
If a shutdown proceeds, Spirit would become one of the largest airline failures in recent years. Thousands of passengers could be stranded, and employees face uncertain futures.
Industry analysts say the collapse highlights the challenges facing ultra-low-cost carriers. Smaller airlines often struggle to survive downturns without a strong financial cushion.
Spirit has not made an official announcement about shutting down. But internal memos suggest preparations are underway for a possible closure.
