(Reuters) -Spirit Airlines filed for bankruptcy after the U.S. one-way pioneer struggled with a long streak of quarterly losses and significant debt, it revealed on Monday.
The airline’s woes deepened after the collapse of its planned $3.8 billion merger with JetBlue Airways (NASDAQ:) in January and the impact of RTX’s Pratt & Whitney Geared Turbofan (GTF) engines that have grounded many of their planes.
Spirit, recognized for its bright yellow color, had been losing money despite strong travel demand, while struggling with inflated costs.
The airline has reached an agreement with its bondholders that is expected to reduce overall debt and provide greater financial flexibility, it said on Monday.
Spirit began as a long-haul trucking company in 1964 before moving into aviation around 1983. It offered leisure packages to popular destinations under the name Charter One Airlines and was renamed Spirit in 1992.
The discount airline became popular with budget-conscious customers willing to give up services like checked bags and seat assignments.
Ultra-low-cost airlines, which have excelled at keeping expenses low and offering affordable, easy travel, have struggled since the pandemic as travelers prefer to pay more for more comfortable travel while seeking out experiences.
Spirit’s problems, along with those of some of its rival low-cost airlines, have spurred talk of a flawed business model among some Wall Street analysts.