Spirit Airlines preparing for bankruptcy amid failed merger and financial turmoil

Spirit Airlines is now reportedly in advanced talks over a possible bankruptcy filing following a failed merger and continued financial struggles, The Wall Street Journal reported Tuesday evening.

The company had been exploring a merger with another low-cost airline, Frontier Airlines, in hopes of restructuring its debt and other liabilities without a bankruptcy filing. In March, JetBlue and Spirit Airlines ended their proposed $3.8 billion merger after a court ruling blocked the deal.

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JetBlue said that even though both companies still believe in the benefits of a combination, they felt they were unlikely to meet the required closing conditions before the July 24 deadline and mutually agreed that terminating the deal was the best decision for both.

Now, Spirit may be preparing to file for Chapter 11 bankruptcy protections to facilitate the restructuring of the company and its debts. The filing could come within the next few weeks.

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