Spirit Airlines is preparing to file for bankruptcy protection after new merger talks with Frontier Airlines broke down, the Wall Street Journal reported, citing people familiar with the matter.
The ultra-low cost carrier is in advanced discussions with bondholders to hammer out a bankruptcy plan that would have support from a majority of creditors, the report said.
Spirit is preparing a bankruptcy filing within weeks, the report added.
Spirit did not immediately respond to a Reuters request for comment.
Shares plummeted 45% to $1.47 in after-hours trading.
The carrier has been losing money despite strong travel demand. It has failed to report a profit in the last five out of six quarters, raising doubts about its ability to manage looming debt maturities.
Last month, Spirit said it would furlough about 330 pilots on Jan. 31 as part of its efforts to cut costs and shore up its finances.
