Shares of Spirit Airlines fell 26 percent in midday trading Friday after the Wall Street Journal reported that the low-cost carrier was in talks with its owners about filing for bankruptcy.
The stock has lost more than 85 percent of its value this year as the carrier grapples with the fallout from the failed $3.8 billion JetBlue Airways merger.
Spirit’s long-term debt and finance leases totaled approximately $3.06 billion, excluding current maturities, as of Dec. 31.
The timing of such a request, if it were to happen, would not be imminent, according to the report.
The airline, which has failed to report a profit in five of the past six quarters, has had to ground several Airbus planes due to problems with the Pratt & Whitney turbofan engines.
The company posted a heavy loss in the third quarter due to what it called a “fierce competitive battle” for price-conscious leisure travelers and an oversupply of airline seats in the domestic market.
Spirit CEO Ted Christie in June dismissed concerns about a possible Chapter 11 bankruptcy and said it was “encouraged” by the plan it had in place after the collapse of the JetBlue merger.
Reporting by Pratyush Thakur in Bengaluru; Edited by Leroy Leo.
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