In a significant setback for Spirit Airlines, the airline's planned sale to JetBlue has been derailed by a federal judge in Boston, who ruled on Tuesday that JetBlue’s $3.9 billion acquisition proposal would violate antitrust laws. This decision comes at a critical juncture for Spirit, which has not turned a profit since before the pandemic and is grappling with $1.1 billion in debt maturing next year, coupled with grounded planes due to engine issues.

　　With the deal blocked, analysts are now considering the possibility of Spirit filing for Chapter 11 bankruptcy, although it could also search for another buyer or remain independent. Helane Becker, an experienced airline analyst from Cowen, suggests that "a more plausible scenario involves a Chapter 11 filing followed by liquidation," emphasizing the limited options for Spirit to restructure its operations.

　　Despite raising $419 million through mortgaging many of its aircraft recently, JPMorgan analyst Jamie Baker cautions that Spirit's liquidity-raising prospects appear weak moving forward. Fitch Ratings, the credit-rating agency, states that Spirit's credit profile is under strain post-court ruling and urges the airline to outline a near-term plan to maintain liquidity, manage refinancing risks, and improve profitability to avoid a downgrade.

　　Spirit, headquartered in Miramar, Florida, last posted an annual profit in 2019 and has since accumulated over $1.6 billion in losses. Bank of America analysts have downgraded Spirit's stock, highlighting the risk of the airline potentially defaulting on debt payments due in September 2025. Additionally, mandatory inspections and potential engine replacements due to a manufacturing defect will lead to a significant portion of its fleet being grounded this year, further hampering growth projections.

　　JetBlue and Spirit expressed their disagreement with the court's ruling and are contemplating their next legal steps. Meanwhile, investors are speculating on the implications of this ruling for other airline mergers and acquisitions, particularly the Alaska Airlines' pending offer to buy Hawaiian Airlines. Deutsche Bank analyst Michael Linenberg predicts that the government's successful opposition to both the JetBlue-Spirit merger and a previous partnership between JetBlue and American Airlines may cast a shadow over future M&A activity within the airline industry.