Spirit Airlines is in deal talks with investment firm Castlelake as struggling carrier seeks path forward

Group 1: Company Situation - Spirit Airlines is in discussions with Castlelake for a potential takeover as it seeks a way out of Chapter 11 bankruptcy, having filed for protection twice in a year due to failed turnaround plans [1] - The airline has amended its agreement with creditors to secure an immediate $50 million in funding, with further funding contingent on progress in restructuring or a strategic transaction [4] - Spirit has significantly reduced its operations by cutting flights, downsizing its fleet, and laying off employees to save costs, with unions agreeing to $100 million in pay cuts for pilots and flight attendants [5] Group 2: Industry Context - The airline industry has faced challenges post-pandemic, including rising wages and costs, changing customer preferences, and an oversupply of domestic flights leading to lower airfares, particularly affecting U.S.-focused carriers [6] - Spirit's operational difficulties were exacerbated by a Pratt & Whitney engine recall that grounded many of its Airbus aircraft and a blocked acquisition by JetBlue due to antitrust concerns [7] - In an effort to attract higher-spending customers, Spirit has been introducing roomier seats and bundled fare options to compete with larger airlines that have benefited from affluent customers post-pandemic [8]