How could Spirit Airlines' bankruptcy affect your travel?

Spirit Airlines has filed for bankruptcy protection, but most flights are expected to continue as planned for now.
Passengers with existing Spirit reservations should monitor for notifications of possible changes to their itinerary.
The fate of Spirit’s planes depends on whether it owns them or is leased and whether the airline chooses to sell them during bankruptcy proceedings.

Spirit Airlines officially filed for bankruptcy protection Monday after the company, a pioneer of low-key travel in the U.S., struggled with three months of losses, failed merger attempts and looming debt maturities.

Spirit’s troubles were deepened in January by the collapse of its planned $3.8 billion merger with JetBlue Airways and the impact of RTX’s Pratt & Whitney Geared Turbofan engines, which caused many of its planes to be grounded.

The airline listed its estimated assets and liabilities at between $1 billion and $10 billion each, according to a court filing Monday.

Spirit signed an agreement with bondholders that is expected to reduce overall debt and increase financial flexibility.

The airline received commitments for a $350 million equity investment from existing bondholders as part of its prearranged Chapter 11 bankruptcy protection.

Existing bondholders will also provide $300 million in debt-in-debt (DIP) financing, which, along with existing cash, is expected to support the airline through the Chapter 11 process.

Spirit is expected to be delisted from the New York Stock Exchange in the near future.

The carrier said it expects to continue flight operations throughout the proceedings and that customers will be able to book and fly without interruption. Travelers need not worry about their travel plans or frequent flyer miles right away.

“It will be smaller in the short term,” Robert W. Mann Jr., former chairman and current chairman of independent airline consultancy RW Mann and Co., told USA TODAY. “If you have already received notification that your flight has been canceled or needs to be rebooked, you have already received this notification.”

Spirit had previously announced pilot furloughs and capacity cuts to address ongoing financial problems as well as well-documented engine issues that have caused many Airbus A320s to be grounded at airlines. Spirit was hit hard by these errors as it only flies aircraft in the A320 family, which has already limited capacity as a result.

Here’s what travelers need to know as Spirit enters bankruptcy.

What will happen to flights already booked?

Most, but not all, flights will operate as planned in the near term.

Thanksgiving travel is not particularly likely to be affected, Mann said, but there could be schedule changes and cancellations later in the winter.

“It is quite likely that there will be other changes when it comes to the 45-day period at the end of the year,” Mann said.

Passengers with existing Spirit reservations should keep an eye out for notifications from Spirit regarding any changes to their itinerary as their departure date approaches.

“Their best notification would be the notification they get from the carrier, whether it’s time changes or rebooking or inability to rebook, cancellations. Then of course they’ll be subject to the new (Department of Transport) rules on how passengers should be treated so that’s probably an important thing to understand.” said Mann.

The Department of Transport recently finalized guidelines requiring airlines to provide passengers with the following information: full refund If the flight is canceled or delayed for any reason by more than three hours in the domestic itinerary and six hours in the international itinerary. Passengers are eligible for refunds only if they choose not to travel on a delayed flight or on an alternative itinerary offered by the airline.

Can I transfer my Spirit loyalty miles/points to another airline?

Generally, airline loyalty points or miles are non-transferable, but Mann said frequent flyer programs are valuable assets that often survive bankruptcies.

“That’s an asset, at least in terms of people who can buy them. You also get a customer base,” he said. “This could actually be a source of funding going forward.”

It’s also possible that Spirit could emerge from bankruptcy through a merger. Many industry observers predict that the incoming Trump administration will be friendlier to airlines joining forces than the Biden administration. Under the Biden administration, a proposed merger between Spirit and JetBlue was rejected, and Frontier Airlines also recently backed away from a proposed merger with its yellow ultra-low-cost rival, as first reported by The Wall Street Journal. These deals may be revived, or another potential buyer may step into a different regulatory environment.

If Spirit merges with another airline, its frequent flyer program is likely to be part of the package and be combined with the other airline’s program.

Who controls Spirit’s planes?

It depends.

Spirit does not own all planes anyway. The lessor will keep the leased portion of its fleet and be free to re-lease it to Spirit or another airline, depending on the offers on the table.

Spirit-owned planes could be sold to raise cash during bankruptcy, but the airline may choose to sell other assets such as gates and airport slots instead if its executives think the planes are more likely to generate revenue by remaining in service.

Contributed by: Reuters

Zach Wichter is USA TODAY’s New York-based travel reporter. You can reach him at [email protected].

What will happen to flights already booked?

Can I transfer my Spirit loyalty miles/points to another airline?

Who controls Spirit’s planes?

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