Spirit Airlines is currently in discussions with creditors to explore strategic alternatives in order to improve its liquidity. The airline has reported that negotiations with a majority of noteholders have been productive and will continue in the near future.

However, if an agreement is not reached, there is a possibility that existing equity could be cancelled and all options will be considered. The airline is projecting a 12% decline in adjusted operating margin for the third quarter compared to the previous year.

Reports suggest that Spirit Airlines is preparing to file for bankruptcy protection after merger talks with Frontier Airlines fell through. The airline's stock price has dropped significantly, declining by almost 80% this year, while the S&P 500 passenger airlines index has risen by 52%. Despite strong travel demand, Spirit Airlines has faced financial difficulties and has not reported a profit in five of the last six quarters, raising concerns about its ability to manage upcoming debt maturities.

As part of cost-cutting measures, the airline plans to furlough around 330 pilots by January 31 and is selling 23 older Airbus aircraft for $519 million, with expected proceeds of $225 million to enhance liquidity in the coming year.