While nothing will sink an airline's investment prospects quite like a formal Chapter 11 filing, even rumors of a looming bankruptcy are often enough to set off an already-near downfall.In the U.S., Spirit Airlines (SAVE) is the biggest cause of bankruptcy rumors. After a federal judge put the kibosh on JetBlue (JBLU) 's plans to acquire it for $3.8 billion back in January, the low-cost airline is left with few options to reverse the string of unprofitable quarters it has been reporting for more than a year. While the airline has repeatedly shot down any bankruptcy speculation, aviation analysts such as TD Cowen's Helane Becker has argued that a "Chapter 11 filing, followed by a liquidation" is the "more likely scenario."Related: Spirit CEO says airline will not file for bankruptcyThe third-largest airline in Brazil by passengers carried and the fourth-largest in South America, Azul Linhas Areas (AZUL) has recently been struggling with keeping a low-cost model profitable in a country like Brazil — large in size but with high fuel prices and a weak currency. Current chief executive John Rodgerson had previously called it the "Costo Brasil" (the country is spelled with an 's' in Portuguese) to justify the airline's accumulated losses of over BRL 30.5 billion ($5.41 billion USD).Azul shares are tanking but CEO calls reports 'unsubstantiated'Last week, financial news outlet Bloomberg reported that a bankruptcy filing in the U.S. is one of several options being explored by the airline amid its mountain of debt. Other options named by "people familiar with the matter" would be a merger with rival GOL Linhas Aereas (GOL) which is dealing with its own financial problems or an equity offering.More on retail and bankruptcy:Walmart store closing, auctioning off laptops and flat screen TVs Home Depot CEO sounds the alarm on a growing problemFamous restaurant files for Chapter 11 bankruptcyAzul shares dropped immediately upon publication of the report and have regained only slightly since Thursday, Aug. 29. Sinking by as much as 25% at a peak at the end of the week, stock ended Sept. 3 down 9.61% at $2.54 USD. Stock is down 70% year-to-year.Rodgerson responded by calling the report "unsubstantiated" and said the airline was in "active talks" about financial solutions that do not include bankruptcy. Bloomberg further reported that the airline is also talking to lenders from Citigroup to avoid bankruptcy by taking on more debt through its cargo division.Related: Get the best cruise tips, deals, and news on the ships from our expert cruiserThese are the airlines that have filed for bankruptcy this year2024 has been a challenging year for numerous airlines as more than an average number have filed for bankruptcy globally.Air Malta, Armenia's FlyArna as well as Lynx Air and Canada Jetlines in Canada have all declared bankruptcy. In the latter case, the airline that would shuttle Canadian tourists to warm destinations in Florida and Jamaica suddenly canceled all its flights and told affected travelers to file for refunds through their credit cards as it would not be able to offer them.In May, the small South Pacific carrier's flagship nation Air Vanuatu also left those with tickets stranded after saying that the "extended maintenance requirements" required for the four planes in its fleet were not something it could manage financially.Ernst & Young liquidators from Australia are currently working with the government of Vanuatu to ensure that the remote nation of just over 326,000 people is not left without an airline.Related: Veteran fund manager sees world of pain coming for stocks
