Budget airline Spirit Airlines is facing turbulent times as reports suggest the company is gearing up to file for Chapter 11 bankruptcy protection. Following the breakdown of merger discussions with Frontier Group Holdings, the airline's financial health has come under increasing scrutiny. The Wall Street Journal recently highlighted the airline's precarious situation, with mounting pressure from shareholders and bonds nearing their expiration date.

The failed merger talks have sent shockwaves through the financial markets, resulting in a significant drop in Spirit's share price. Speculation is rife that the airline is on the brink of a financial collapse, with rumors swirling about an impending Chapter 11 filing.

Spirit had been in talks with Frontier about a potential merger, but the deal fell through, leaving the airline in a precarious position. Despite attempts to revive discussions post-JetBlue's takeover plans for Frontier being blocked, no agreement was reached, leaving Spirit facing an uncertain future.

Both Spirit and Frontier declined to comment on the situation, further adding to the speculation surrounding the airline's financial woes. Any potential filing for Chapter 11 would require approval from creditors and could allow the airline to continue its operations while restructuring its debts.

With debts totaling billions of dollars and bonds set to expire soon, the airline is under immense pressure to find a viable solution. Talks with bondholders are ongoing, with analysts warning that bankruptcy may be inevitable without a successful resolution.

Spirit's recent announcement of its Form 12b-25 filing revealed the challenges the airline faces in meeting financial reporting deadlines. Management is currently engaged in discussions with bondholders to restructure obligations and explore strategic alternatives to enhance liquidity.

In light of its financial predicament, Spirit has been scaling back operations, including reducing flights and furloughing hundreds of pilots. The airline's struggles have been further exacerbated by maintenance issues with its Airbus A320neo fleet.

As Spirit Airlines navigates these challenging times, its future hangs in the balance, with stakeholders closely monitoring developments in the coming weeks.