Spirit Airlines has filed for bankruptcy for the second time in a year, facing challenges in downsizing its fleet and navigating market conditions for US air travel. The bankruptcy lists assets and liabilities between $1 billion and $10 billion, with negotiations ongoing with stakeholders. Larger carriers are intensifying competition with budget airlines like Spirit and others.

Low-cost carriers like Spirit, Frontier, and Southwest are adjusting their business models to attract cost-sensitive passengers. Market turbulence and oversupply have impacted ultra-low-cost carriers more severely, given their lack of long-haul international routes. Spirit’s board faces tough negotiations with lessors to downsize its fleet and cut costs amid uncertain market conditions.

Spirit received a notice of default from aircraft lessor AerCap Holdings, threatening to terminate dozens of leases. The airline may try to return up to 150 leased planes, with tough negotiations on the horizon. Spirit could explore a combination with rival Frontier Group Holdings Inc., making it a potential takeover target during bankruptcy proceedings.

The filing follows a failed acquisition attempt by JetBlue Airways Corp. in 2022. The airline industry remains uncertain, with Spirit grappling with market challenges and potential restructuring. Bankruptcy could make Spirit more susceptible to a suitor, echoing past merger experiences in the industry.

Read more at Yahoo Finance: Spirit Airlines Bankruptcy Tees Up Painful Cuts in Survival Bid