The U.S. carrier is seeking Chapter 11 protection.

Above, a Spirit Airlines 319 Airbus approaches Manchester Boston Regional Airport in 2023 in Manchester, N.H.

By Charles Krupa | The Associated Press

Spirit Airlines told customers Monday that they should continue feeling comfortable booking flights "now and in the future," despite the airline filing for bankruptcy.

The U.S. carrier sought Chapter 11 protection in New York on Monday to restructure $1.6 billion of debt after struggling to overcome mounting losses and failed merger attempts, according to court filings.

The company said it plans to relinquish control to its bondholders. Its shares will be delisted.

In the message to customers, Spirit said the agreement "is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value." The company has said it will continue to operate normally throughout the bankruptcy process, which it expects to complete early next year.

The carrier said during that time, customers can continue to use their tickets and loyalty points and benefit from rewards programs. A representative for Spirit declined to comment further.

The proceedings come ahead of the busy Thanksgiving travel season, which Airlines for America, a trade group for the largest carriers, predicts it will set an all-time record with more than 31 million passengers flying on U.S. airlines.

Spirit had been seeking to tie up with rivals amid competition from traditional carriers and higher inflation. It was forced to start restructuring talks with creditors after a federal judge blocked a $3.8 billion acquisition by JetBlue Airways Corp., ruling the combination would harm cost-conscious travelers by driving up the price of airline tickets across the industry. Separate talks for a merger with Frontier Group Holdings Inc. also fell apart in recent weeks, paving the way for the bankruptcy filing.

The discount carrier has reached a broad overhaul agreement with creditors holding about 80% of the debt to be restructured and has enough support to receive court approval, according to court documents.

The carrier said it has about $3.6 billion in long term debt, including $136 million in unsecured term loans it owes the federal government as part of Covid-19 pandemic-era related support.

Spirit, which employs 12,800 people, has struggled following the Covid-19 pandemic as the largest US carriers stepped up use of basic economy fares to lure travelers away, while part of its fleet was grounded by an engine manufacturing defect. Most recently, fares were held down during the crucial summer travel period because airlines put too many seats into the domestic market.

The company has posted annual losses since 2020 and its stock has plummeted 93% this year through Nov. 15.