FAQ: Spirit Airlines' bankruptcy and how it might affect your travel

18.11.2024 - 20:27 / thepointsguy.com

Spirit Airlines filed for Chapter 11 bankruptcy protection on Monday, becoming the first major U.S. airline to do so since 2011.

The news may be unsettling to customers booked on Spirit, but the carrier says it should operate as normal while it goes through bankruptcy proceedings.

Here's what you need to know.

Yes. The carrier says it will be business as usual as it goes through the bankruptcy process. Spirit plans to operate its flights and pay its staff just as it had before filing for bankruptcy.

There's actually a strong precedent for this in the U.S. airline industry. American, Delta and United have all filed for bankruptcy during the past two decades, and each operated largely as normal during the process. American, which sought Chapter 11 bankruptcy protection in 2011, is the most recent among major airlines. It emerged from bankruptcy protection in 2013 as part of a merger with US Airways that, at the time, made it the world's largest airline.

Not necessarily. Spirit will look to overhaul its business model to focus on profitability, and that could lead to some longer-term changes to its route map. But that process was already underway even before bankruptcy.

Additional changes remain possible going forward, but it's not as if a Chapter 11 bankruptcy filing flips some switch that immediately triggers a bunch of cuts. Instead, it'll likely be a continuation of incremental changes and updates Spirit would seek to move to a more profitable business model.

For now, Spirit said it expects to operate its normal schedule — including through the busy upcoming holiday period.

Now, more broadly, flights on ultra-low-cost carriers like Spirit (along with Frontier Airlines, Allegiant Air and others) do inherently come with a higher-than-normal risk of route changes. These carriers typically don't stick out money-losing routes for very long, and that will likely remain true for Spirit — just as it was prior to its bankruptcy filing.

Spirit says it will continue to run its Free Spirit loyalty program as normal, so all earnings and redemptions should be unaffected. The same holds true for any vouchers or credits with the airline.

The carrier has also said the terms of its cobranded credit card will remain unaffected as the proceedings play out.

In Spirit's words Monday: "Absolutely not!"

Ultimately, it's impossible to say exactly what Spirit's future holds. However, big U.S. airlines that have filed for Chapter 11 bankruptcy protection this century have kept flying — and have usually emerged as stronger, leaner competitors. This includes American, Delta and United.

The Chapter 11 bankruptcy process is meant to give companies protection from creditors while they attempt to reorganize their finances and