If you’ve ever flown on a budget, chances are you’ve flown on America’s yellow highlighter — Spirit AirlinesSAVE

. Since rebranding as an ultra-low-cost carrier in Mar. 2007, Spirit has expanded to over 600 routes, thanks to its sub-$100 fares. However, it has struggled to recover from the COVID-19 pandemic and hasn’t turned a profit since 2019. To avoid the need for new funding or facing reorganization, the airline tried to sell to JetBlueJBLU

, but the deal was subsequently shot down by the Department of Justice. Since then, things have gone downhill, and the airline is preparing for the worst.

• After the JetBlue deal fell through, Spirit began slashing routes, cutting staff, and deferring aircraft deliveries to save money. It also started seeking emergency financing to stay afloat.
• The airline amassed a $335M net loss on over $2.5B in revenue for the first half of the year, leading it to consider bankruptcy or restructuring to help manage its $3.3B in debt.

Come fly with me: As a result, Spirit shares plummeted more than 30% to end the week — bringing the company’s valuation to an all-time low of $180M. On the news, budget competitors JetBlue and FrontierULCC

saw their shares rise 14% and 20%, respectively, as investors weighed the potential impact of Spirit’s collapse — or the possibility of selling its assets to these very interested rivals. At this stage, it’s hard to discern what could come from the Spirit deal — but Citigroup’s Stephen Trent warns that the airline has “little room for error” (YF).