Spirit's shares have lost more than 60% of their value since U.S. District Judge William Young ruled on Tuesday that the company's $3.8 billion sale to JetBlue should not proceed, siding with antitrust regulators who argued the deal would lead to higher fares for passengers.

The value of Spirit's bonds have also plunged in value, highlighting its financially precarious position were it to be left without a deal. Its bonds went from trading around 75 cents on the dollar down to 50 cents, amid investor concerns about the company's ability to pay some $1.1 billion in debt due in September 2025.

Spirit has told JetBlue that their deal contract requires them to exhaust legal options to complete their deal, and that they should appeal the judge's ruling, the sources said.

JetBlue, however, has yet to decide whether it will seek an appeal, according to the sources. It is assessing the chances of an appeal succeeding and is also mindful that Spirit's business has deteriorated significantly since the two agreed the tie-up in July 2022, the sources said.

Some analysts have pointed out that JetBlue may be better off paying Spirit and its shareholders a $470 million break-up fee to terminate the deal. But to do so, JetBlue will have to show that it fulfilled its obligation under the deal contract to do everything it can to get the deal completed.

It is possible that the two airlines agree to appeal the judge's decision. Their spokespeople did not respond to requests for comment. The companies said in a joint statement on Tuesday that they were "evaluating next steps as part of the legal process." They have been afforded 30 days to lodge an appeal.

JetBlue had already sought to tackle U.S. regulators' concerns by agreeing to divest gates and slots at key airports in New York City, Boston, Newark, New Jersey, Fort Lauderdale and Florida.

A person familiar with the matter told Reuters on Thursday that Spirit had began examining ways to refinance its debt should its deal with JetBlue fall through.

Spirit, which like other airlines took a financial hit during the COVID-19 pandemic, has struggled more than its peers to recover, because its low-budget price model has left it little room to raise air fares after fuel prices rose. Its net debt rose from $3.3 billion to $5.5 billion over the past two years as its losses widened.

JetBlue, while cheaper in its fares than many of its peers, is a higher-budget airline than Spirit, and has fared better as a result.

Spirit has been among the carriers hardest hit by a snag with RTX's Pratt & Whitney Geared Turbofan (GTF) engines, which has forced it to ground several planes, weighing on its profitability. It has also been grappling with soaring pilot pay rates.

The four main U.S. carriers - United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines - control roughly 80% of the market following a series of airline mergers in the past few decades.

(Reporting by Anirban Sen in New York and Rajesh Kumar Singh in Chicago; Editing by Greg Roumeliotis and Michael Perry)

By Anirban Sen and Rajesh Kumar Singh