Spirit Airlines (SAVE) lost more than a quarter of its remaining value on Friday – dropping 28% after investors suspected it could soon file for bankruptcy. The Wall Street Journal reported Thursday that the company is in discussions with bondholders about what a debt restructuring could look like.
There has been speculation for months that Spirit could go bankrupt. After a judge blocked the $3.8 billion merger with JetBlue Airways (JBLU) on antitrust grounds in January, the two companies called off their attempted partnership two months later rather than pursue the deal through appeal to make.
While JetBlue has called the situation “three years of distraction” and moved on, Spirit has had more trouble going it alone. (This isn’t the first time there have been reports of an impending bankruptcy.) While it has tried things like eliminating certain fees and teasing more comfortable seating options than the usual budget offerings, the company’s shares remain down around 90 this year % down.
The airline’s latest financial report showed its 11th consecutive quarterly loss and revealed the company is struggling to make progress in a turnaround as it increasingly competes with larger so-called “legacy” players for low-fare customers. Spirit declined to comment to Quartz on the report, but pointed Quartz to CEO Ted Christie’s comments during the August earnings call.
“We are in productive discussions with our bondholder advisors to address upcoming debt maturities,” he said at the time. “Because these conversations are ongoing, we will not go into detail, ask questions about this topic, or speculate on possible outcomes.”
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