NEW YORK, Nov 19 –– Spirit Airlines, known for its ultra-low-cost model, has filed for Chapter 11 bankruptcy protection as it seeks to address escalating financial challenges, reported Xinhua.

The move highlights persistent challenges in the aviation sector, where economic uncertainties, rising costs, and industry shifts have placed immense strain on smaller carriers.

The airline intends to continue operating its flights during the restructuring process and has assured customers that tickets, vouchers, and frequent flyer miles will remain valid.

Ted Christie, CEO of Spirit Airlines, tried to reassure customers that they can still book, fly and use loyalty points on the carrier. "The most important thing to know is that you can continue to book and fly now and in the future,” Christie said in a letter to customers on Monday.

Spirit’s bankruptcy comes after years of grappling with high debt, surging fuel costs, and labour expenses.

The company’s financial troubles deepened following the collapse of a proposed merger with JetBlue Airways earlier this year. The deal, which faced legal and regulatory hurdles, could have fortified Spirit’s position in the competitive low-cost market but was ultimately abandoned.

Spirit is the first major US airline to file for Chapter 11 since American Airlines 13 years ago. However, airlines globally are facing rising jet fuel prices and inflation-driven cost increases, which have made it harder to sustain low-fare pricing strategies. Competing budget carriers, such as Frontier Airlines, are also facing headwinds, raising questions about the long-term viability of the ultra-low-cost model.

Spirit had said it expected its third-quarter operating margins to be 12 percentage points below its negative-15 per cent margin it posted a year ago as costs surged and fares slipped. Sales fell by US$61 million (272 million).

As a result of the bankruptcy filing, Spirit expects to be delisted from the New York Stock Exchange in the near term, it said Monday, adding that its common stock is expected to be cancelled and have no value as part of the restructuring. Spirit’s shares plunged around 18 per cent on Monday. –– Bernama-Xinhua