Spirit Airlines files for bankruptcy protection after mounting losses [Video]

Spirit Airlines, an icon of budget air travel that reshaped the industry, has filed for bankruptcy protection after years of mounting losses, a failed merger, increased competition and more demanding consumer tastes.

The carrier early Monday reached a prearranged deal with its bondholders, including $300 million in debtor-in-possession financing, to help it through the bankruptcy, which it said it expects to exit in the first quarter of next year. Spirit said vendors and aircraft lessors will not be impaired. Spirit listed its assets and liabilities between $1 billion and $10 billion, in a court filing.

The airline said it expects to continue operating, and CEO Ted Christie tried to reassure customers that they can still book, fly and use loyalty points on the carrier.

“The most important thing to …