Spirit Airlines, the ultra-low-cost carrier recognized for its budget-friendly offerings, has filed for Chapter 11 bankruptcy protection as it seeks to navigate mounting financial pressures.

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 labor 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.

Adding to the airline's challenges is an industry-wide slowdown in demand for budget travel. While larger airlines have rebounded from the pandemic, ultra-low-cost carriers like Spirit have struggled to maintain profitability. Analysts cite difficulties in balancing rising operational costs with the low fares that have defined Spirit's business model.

Spirit plans to use the Chapter 11 process to reduce its debt, renegotiate contracts, and secure additional capital to stabilize its financial position. Industry insiders suggest that the restructuring will likely involve scaling back operations, cutting unprofitable routes, and potentially downsizing its workforce.

The filing also underscores broader pressures on the aviation industry. Spirit is the first major U.S. 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 were 12 percentage points below its negative-15 percent margin it posted a year ago as costs surged and fares slipped. Sales fell 61 million U.S. dollars.

Despite these challenges, Spirit's management remains optimistic about its future. In a statement, the airline said it is committed to "delivering reliable and affordable travel options" to its customers and believes the restructuring process will position the company for long-term success.

Passengers and industry observers alike will now watch closely as Spirit navigates its restructuring. Spirit may also face the possibility of being acquired by another carrier or undergoing liquidation. In the past, several airlines, such as American Airlines, have seen their assets sold during bankruptcy proceedings and subsequently merged with other carriers.

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 canceled and have no value as part of the restructuring. Spirit's shares plunged around 18 percent on Monday.