According to WSJ, Spirit Airlines is negotiating terms with bondholders for a possible bankruptcy filing

(Reuters) – Spirit Airlines is negotiating with bondholders over the terms of a possible bankruptcy filing following its failed merger with JetBlue Airways, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

Spirit shares fell 18% in after-hours trading.

Spirit Airlines did not immediately respond to a Reuters request for comment.

The report added that the budget airline is also considering restructuring its balance sheet through an out-of-court transaction, although recent discussions have focused more on reaching an agreement with bondholders and other creditors to support a Chapter 11 filing.

The timing of such a filing, if it occurs, is not imminent, the WSJ report said.

In June, CEO Ted Christie said the airline was not considering Chapter 11 bankruptcy and was “encouraged” by the plan it implemented after the deal with JetBlue collapsed.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shailesh Kuber)