Spirit Airlines (SAVE) is reportedly scrambling for ways to deal with its debt, the latest indication of the troubles the company faces if it unable to merge with JetBlue Airways (JBLU 1.05%). Investors are scrambling for the exits, sending Spirit shares down 28% as of 1:30 p.m. ET Thursday.

Spirit is getting serious about its debt

Spirit Airlines is flying through some heavy turbulence right now. Just two years ago, the airline was the target of competing offers from JetBlue and Frontier Group Holdings that resulted in Spirit being valued at nearly $4 billion.

JetBlue won the bidding war, but the suitor's hopes of acquiring Spirit were dashed earlier this week when a federal judge sided with antitrust regulators seeking to block the merger as a threat to competition. The airlines could appeal the ruling, but with time running out on the agreement and the aviation landscape growing more treacherous in the quarters since the deal was announced, there appears to be little momentum left to get the merger done.

As was noted when the ruling was announced, the decision puts Spirit in the unenviable position of having to survive a potential recession on its own with debts piling up and some of its planes out of commission due to engine issues. The company has about $1.1 billion in debt due in 2025, and with interest rates soaring it will be difficult for it to refinance.

Spirit intends to discuss its options with advisors, according to a Thursday Wall Street Journal report. Investors are worried that the discussions could lead to a bankruptcy filing that would address the debt but also wipe out equity holders, sending the shares to fresh lows.

Is Spirit Airlines a buy after the stock's rapid plunge?

Shares of Spirit have lost more than 70% of their value since the judge's decision and are down 90% over the past three years.

The company's troubles come at a unique time for the airline industry. Typically, airlines get into trouble at the depths of a recession when there is little demand for new aircraft. That can allow for an orderly restructuring, as creditors have few options should they decide to repossess planes.

But with Boeing and Airbus struggling to keep up with demand, aircraft remain in high demand even as questions about the economy have surfaced and demand for air travel appears to have cooled. Spirit likely has little leverage in negotiations with creditors because repossessed aircraft could likely easily be farmed out to other carriers.

It is far too soon to say anything definitive about Spirit's future. But the risks are significant enough for investors to turn away. Unless Spirit can resurrect a merger agreement or find another way to raise cash, it is hard to be optimistic about where the airline goes from here.