Spirit Airlines is preparing to file for bankruptcy protection after merger talks with Frontier Airlines broke down, according to people familiar with the matter. The Florida-based budget airline is in advanced discussions with bondholders to hammer out a bankruptcy plan that would have support from a majority of creditors,

Spirit Airlines shares plunged Wednesday on a report that the budget carrier is getting ready to file for bankruptcy protection after revived merger talks with Frontier Airlines parent Frontier Group Holdings collapsed.

Spirit Airlines is reportedly considering bankruptcy protection. That's likely to mean flying fewer routes, allowing competitors to raise prices.