Spirit Airlines announced on Monday that it has submitted an application for Chapter 11 bankruptcy protection.
The airline has been grappling with losses, increasing debt, and a failed merger during the post-pandemic travel lull.
In a stock market statement, the company announced that it had reached a prearranged agreement with bondholders to provide $300 million in financing to maintain its operations.
The business intends to conclude its bankruptcy proceedings in the first quarter of 2025.
Spirit has become notorious over the past several years after numerous viral videos appeared which showed out of control fights occurring on board the planes between passengers.
The company announced in a statement that ticket sales and all other operations will proceed as usual.
This announcement is made just 10 days before anticipated record-breaking numbers of travelers take to the skies over Thanksgiving.
The company, which is headquartered in Dania Beach, Florida, had previously postponed the payment of $1.1 billion in debt until the following year and was last profitable in 2019.
The agreement includes a $350 million equity investment from bondholders, which the company stated is equivalent to $795 million in outstanding debt.
The Wall Street Journal reported that the company was preparing to file for bankruptcy protection, resulting in a decline in its share price from $3.22 to $1.15 last week. The company’s share price closed at $1.07 on Friday.
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