Spirit Airlines could move toward liquidation as soon as this week as surging fuel costs linked to the Iran war put further strain on the discount carrier’s finances, Bloomberg reported.
The airline, which has been operating under Chapter 11 bankruptcy protection, has been weighing its next steps as higher operating costs compound existing financial pressures, according to the report.
Spirit filed for bankruptcy in August last year for the second time in less than 12 months, following an earlier restructuring that it exited in March. At the time, the company said it had reached an agreement with creditors aimed at reducing costs and eliminating billions of dollars in debt.
The carrier had previously signalled it expected to emerge from the Chapter 11 process this summer.
However, Bloomberg reported that worsening fuel costs driven by geopolitical tensions in the Middle East have raised the possibility that Spirit could opt for liquidation rather than continue restructuring efforts.