In a move widely expected, Spirit Airlines announced Monday that it has filed for Chapter 11 bankruptcy protection, saying they intend to spend the next year attempting to reboot and recover after the pandemic caused a lapse in travel. Spirit also faced issues after an airplane engine recall, and its high-profile failure to merge with JetBlue Airways.

Spirit has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion over the next year; the airline said they expect to operate as normal as it works its way through a “prearranged, streamlined” Chapter 11 bankruptcy process and that customers can continue to book and fly without interruption.  Spirit employee’s wages or benefits will not be affected from the Chapter 11 process, adding that vendors and leaseholders would continue to be paid.

The budget airline becomes the first U.S. carrier to file for bankruptcy protection since American Airlines more than a decade ago. Spirit said in a statement: “Spirit expects to continue operating its business in the normal course throughout this prearranged, streamlined Chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits, and loyalty points as normal.”

Shares of Miramar, Florida-based Spirit dropped 25% on Friday after The Wall Street Journal reported that the airline was discussing terms of a possible bankruptcy filing with its bondholders. It was just the latest in a series of blows that have sent the stock crashing down by 97% since late 2018 — when Spirit was still making money.

Spirit’s stock dropped 25% last week after the The Wall Street Journal reported that the airline was discussing terms of a possible bankruptcy filing with its bondholders.

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