Spirit Airlines (SAVE) stock plunged as much as 64% early Wednesday, the most on record, as the budget airline explores a deal with creditors to restructure its debt amid a reported threat of bankruptcy after merger talks with Frontier collapsed.

On Tuesday, a Wall Street Journal report said the airline is preparing to file for bankruptcy protection, in a filing that could occur within weeks as its tie-up discussions with Frontier broke down.

This report followed a separate statement from the company late Tuesday, which said it has been in "constructive discussions" to iron out a restructuring deal with holders of its senior secure notes due in 2025.

If an agreement with creditors is executed, it "is expected to lead to the cancellation of the company's existing equity," said Spirit. If a deal with noteholders is not reached, the carrier said it would consider all alternatives.

Spirit stock has fallen over 90% this year.

Spirit also said on Tuesday it would not be able to file its quarterly results for the period ending September 30, as restructuring negotiations have also diverted significant management time and internal resources from completing its financial statements.

The carrier has struggled to get out from a mountain of debt as merger talks with other airlines have failed to materialized.

Last month, Spirit and Frontier had reportedly revived merger talks. Initial tie-up discussions between the two airlines in 2022 ended after JetBlue (JBLU) outbid Frontier. However, the JetBlue merger was blocked in January by a federal judge over antitrust concerns.

Wall Street has grown increasingly bearish on the airline, with analysts maintaining zero Buy ratings, 4 Hold recommendations, and 8 Sell recommendations on the stock, according to Bloomberg data.

TD Cowen analysts lowered their full year estimates under the assumption that the airline “significantly shrinks in a restructuring," in a client note late Tuesday.

"[Tuesday's] news also creates the risk of customers booking away from the airline resulting in even greater pressure on liquidity," TD Cowen analyst Tom Fitzgerald wrote.

"In the event of a restructuring, focus will then shift to the fate of Spirit's fleet," Fitzgerald added. "We expect the airline to sell off the remaining encumbered assets to pay off the associated debt on the aircraft and work to reject leases on the rest of the fleet."

Last month Spirit said it would furlough more than 300 pilots in January and sell older aircraft in order to cut costs.