Spirit Airlines nears bankruptcy after failed merger talks

Spirit Airlines is preparing for bankruptcy after failed merger talks with Frontier Airlines, according to the Wall Street Journal. The Florida-based budget carrier faces mounting losses and upcoming debt maturities.

Spirit is in discussions with bondholders to reconstruct its debts, potentially wiping out existing shareholders if a deal is reached.

Its stock price dropped over 60% to $1.19 in after-hours trading.

Spirit has cut growth plans, furloughed pilots and sold 23 planes for $519 million to help with a $1.1 billion debt due next year. The budget airline also expects lower revenue because of higher costs and fewer fees.

Earlier this year, JetBlue Airways scrapped its $3.8 billion merger agreement with Spirit amid a federal court ruling blocking the deal on antitrust grounds.

In other news from Spirit Airlines
Ben Baldanza, the former CEO of Spirit Airlines, passed away at 62 after battling ALS. 

Baldanza was a pioneer in the US airline industry, introducing the ultralow-cost model that revolutionized air travel.

Under his leadership from 2005 to 2016, Spirit became the most profitable US airline by 2012.