(Bloomberg) — Spirit Airlines Inc . filed for bankruptcy amid increased competition from rival carriers and financial problems following its merger with JetBlue Airways Corp.

The airline filed for Chapter 11 in New York, listing assets and liabilities between $1 billion and $10 billion, according to a court filing.

Spirit has been in negotiations with its creditors since a federal judge blocked that $3.8 billion acquisition by JetBlue, ruling that the combination would hurt cost-conscious travelers by raising the price of airline tickets across the industry. The federal government challenged the tie-up on antitrust grounds. Separate talks for a merger with Frontier Group Holdings Inc. they also collapsed.

The airline has also come under increased pressure from larger carriers to offer passengers more affordable fares.

Spirit filed for bankruptcy after reaching an agreement on a broad debt restructuring with most holders of convertible and loyalty bonds, according to a statement.

Under the plan, existing bondholders will take control of the defunct company after swapping $795 million in debt for equity. The bondholders also committed to inject $350 million in equity and provide $300 million in debt-in-possession financing to support it through the Chapter 11 process, the company said in the statement.

The airline had problems following the Covid-19 pandemic. Larger US carriers have increasingly used basic economy fares to lure travelers away from Spirit. The company has posted annual losses since 2020, and its stock is down 93% this year through Nov. 15.

The discount carrier in recent months has announced it will begin offering items such as extra legroom and free checked bags in response to growing consumer demand for more luxurious travel options. Spirit follows in the bankruptcy budget of Brazilian airline Gol Linhas Aereas Inteligentes SA, which in January filed for Chapter 11 in New York.

The case is Spirit Airlines Inc., 24-11988, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

–With the assistance of Luca Casiraghi, Dayana Mustak and Irene García Pérez.

(Updates with details about the restructuring plan and context in the fifth paragraph. An earlier version corrected the currency in the second paragraph.)

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