What Went Wrong at Spirit Airlines and How It Will Affect You

21.11.2024 - 21:05 / afar.com / Spirit Airlines / Ted Christie / Mike Arnot

Spirit Airlines is embracing the “new year, new me” mindset after announcing this week that it is filing for Chapter 11 bankruptcy. The carrier plans to debut its restructuring plan during the first quarter of 2025; it has signaled that it will be moving away from its traditional budget carrier operating model.

The airline now faces a challenging road ahead as it works to stay in the skies and aims to significantly reduce its debt, as detailed in a letter from CEO Ted Christie shared with loyalty members.

“Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success, and accelerate investments providing guests with enhanced travel experiences and greater value,” wrote Christie.

While bankruptcy filings can cause concern for travelers, it’s important to know these are not uncommon occurrences in the aviation industry. Here’s everything we know so far and what you can expect from Spirit in the months ahead.

Yes, Spirit Airlines is still flying and is not shutting down operations. Filing for Chapter 11 bankruptcy is the first step in addressing financial challenges, including more than $3 million in long-term debt. The news of Spirit’s bankruptcy filing is not a liquidation (when a company shuts down its operations, or in this case, an airline stops flying), but rather an effort to stabilize the company’s finances, although its future will depend on the success of this restructuring process.

If you’ve already booked a flight with Spirit Airlines, the company has reassured travelers that operations will continue as normal throughout the bankruptcy process.

“The most important thing to know is that you can continue to book and fly now and in the future,” Christie wrote in the letter to customers.

No flights have been canceled yet, and all flight credits and Spirit frequent flier miles remain valid for future use. However, Spirit customers should monitor their bookings closely: If a flight is scrapped, federal law entitles passengers to a full refund to their original payment method.

However, flights scheduled beyond the restructuring timeline through next spring may face higher risks of disruption, according to Mike Arnot, aviation industry commentator and spokesperson for Cirium, an aviation analytics company.

“Customers flying during the holiday period will not likely be impacted,” said Arnot, adding that what happens from March 2025 and beyond “remains to be seen.” Arnot noted that if there are schedule changes or cancellations, customers should receive plenty of advance notice.

When it comes to ticket prices, Arnot said that Spirit is unlikely to raise its low fares as a short-term