Spirit files for bankruptcy: What passengers need to know

While Spirit Airlines filed for Chapter 11 bankruptcy protection, the carrier said passengers would still be able to travel as normal. But industry experts warn that the airlines’ financial challenges have already affected operations and will continue to do so.

In an open letter to travelers on Monday, the low-cost airline said it has reached an agreement with bondholders to reduce its total debt, provide increased financial flexibility and position it “for long-term success.”

The company expects to complete bankruptcy proceedings in the first three months of 2025. During that process, the budget company said it expects to “continue to conduct its business as usual.”

SPIRIT AIRLINES FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION

Here’s what airlines told travelers:

In its statement Monday, Spirit said guests will still be able to book and fly “without interruption.” That means travelers will still be able to use all their tickets, credits and loyalty points, according to the airline. The airline also said customers can still use the company’s Free Spirit loyalty program, Saver$ Club perks and credit card terms.

The company also hinted that this process won’t hinder holiday travel either.

“We are grateful that you continue to choose Spirit for your travel needs. As we enter the holiday season and beyond, we look forward to welcoming you back on board soon,” the company said.

Points Guy founder Brian Kelly said filing for bankruptcy does not mean the company is “closing up shop,” a message he believes Spirit is trying to convey to its customers.

“They need consumers to trust the airline,” Kelly told FOX Business. “They are already struggling as it is today, so if people start booking with other airlines, it will mean even more problems for the airline. And they will definitely survive this process.”

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Despite the airlines’ assurances, Kelly believes travelers will inevitably feel the impact.

He pointed out that Spirit has already cut back on various routes, announced plans to lay off pilots and sell planes.

In a Securities and Exchange Commission filing last month, the ultra-low-cost carrier said it identified approximately $80 million in annual cost reductions that it plans to implement next year.

This won’t necessarily affect holiday travel, but it could affect future 2025 travel plans, according to Kelly.

“What this means for the traveler is that if you booked far out on Spirit, there’s a very good chance your flight time could be drastically changed or your flight canceled altogether,” he said.

Because of Ministry of Transport‘s recently adopted automatic refund rule, which defines the circumstances under which airlines must issue refunds passengers are entitled to compensation in the event of cancellations, Kelly said.

But he warned that the disruption could still cause significant headaches, “especially if the cancellation happens closer to departure when all alternative options are much more expensive.”

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Kelly said Spirit’s survival is vital, saying it’s critical to the health of the travel ecosystem.

“Whether you love or hate Spirit, they’re good for the travel ecosystem and for keeping prices relatively low today,” Kelly said, adding that prices today, when adjusted for inflation, are actually cheaper than in 2019.

“It’s because of carriers like Spirit,” he said.