Spirit Airlines is filing for bankruptcy after failed merger talks with Frontier, facing financial losses and upcoming debt obligations.

Spirit Airlines is on the brink of filing for Chapter 11 bankruptcy protection following the collapse of its merger talks with Frontier Airlines. With more than $3 billion in debt, Spirit is negotiating with bondholders for a restructuring plan that could allow it to continue operations under bankruptcy protection.

The ultra-low cost airline is gathering assets for a bankruptcy plan, which motions could be initiated in coming weeks.

Spirit Airlines is preparing to file for bankruptcy protection after merger talks with Frontier Airlines broke down, the Wall Street Journal reported, citing people familiar with the matter. Shares of the company were down 39% at $1.