Spirit Airlines has filed for bankruptcy protection, the U.S. no-nonsense travel pioneer said Monday, after struggling with years of losses, failed merger attempts and high debt levels. It is the first major U.S. airline to file for Chapter 11 in more than a decade, after a proposed $3.8 billion merger with JetBlue Airways collapsed in January.

The Florida-based airline said it had previously reached an agreement with its bondholders to restructure its debt and raise cash to help it operate during the bankruptcy process, which it expects to exit in the first quarter of the year 2025.

Intense competition among U.S. carriers for price-sensitive leisure travel, as well as an oversupply of airline seats in the domestic market, have hurt Spirit’s pricing power. Its average fare per passenger fell 19% year-on-year in the first half of this year from a year earlier.

The carrier said it expected to continue operating as normal during the procedures and customers would be able to book and fly without interruption.

The Chapter 11 filing will not affect the wages or benefits of its employees, it said. Its vendors and aircraft lessors will continue to be paid and will not be affected, it added. The company said it expects to be delisted from the New York Stock Exchange shortly and its shares will be canceled and worthless as part of the restructuring. Shares of Spirit, which have fallen more than 90% this year, were halted on Monday. Shares of rival low-cost carriers Frontier Airlines and JetBlue fell 14 percent and 6 percent, respectively.

The fight for profit

Spirit, known for its bright yellow image, is the first major U.S. airline to file for Chapter 11 since 2011. It was among the airlines hardest hit by problems with its RTX Pratt & Whitney Geared Turbofan engines, which forced to ground more planes. and increased costs.

Spirit hasn’t posted a full-year profit since 2019. It lost about $360 million in the first half of this year, despite strong travel demand.

Analysts say a merger with JetBlue would have thrown the company a lifeline. However, a judge in Boston blocked the deal on the grounds that it would reduce competition, raising doubts about the company’s ability to manage looming debt maturities.

Spirit has scaled back operations as part of its efforts to cut costs and strengthen its finances. It laid off hundreds of pilots and delayed aircraft deliveries. It is also selling its planes to increase liquidity.

Spirit filed for Chapter 11 protection in New York. The airline said a “comprehensive balance sheet restructuring” is expected to reduce overall debt, provide increased financial flexibility, position it for long-term success and accelerate investment.