Spirit Airlines (SAVE) lost greater than 1 / 4 of its remaining value Friday — it’s down 28% after investors suspected it’d file for bankruptcy soon. The Wall Street Journal reported Thursday that the company is in talks with bondholders about what a debt restructuring might seem like.
Speculation has swirled for months that Spirit is prone to be approaching bankruptcy. After a judge blocked its $3.8 billion merger with JetBlue Airways (JBLU) in January on antitrust grounds, the two corporations called off their tie-up attempt two months later somewhat than pursue the deal through an appeal.
While JetBlue has called the situation “three years of distraction” and moved on, Spirit has had more trouble going it alone. (That’s not the first time reports have swirled of an imminent bankruptcy.) Regardless that it has tried things akin to eliminating certain fees and teasing comfier seating arrangements than its usual budget offerings, the company’s stock stays down about 90% for the 12 months.
The carrier’s last financial report showed its eleventh consecutive quarterly loss and revealed its struggle to make headway in a turnaround while having to increasingly compete with larger so-called “legacy” players for low-fare customers. Spirit declined to comment to Quartz on the report but pointed Quartz toward comments made by company CEO Ted Christie during that August earnings call.
“We’re engaged in productive conversations with the advisors of our bondholders to handle the upcoming debt maturities,” he said on the time. “Because those conversations are ongoing, we is not going to be going to enter detail or take any questions on this topic or speculate on potential outcomes.”
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