Spirit Airlines Files For Bankruptcy: This Is How It Will Affect Your Travel Plans?

Spirit Airlines filed for bankruptcy protection on Monday after facing extended financial challenges, including consistent quarterly losses, failed merger attempts, and impending debt deadlines.

$3.8 billion merger with JetBlue Airways

The airline’s difficulties were exacerbated by the collapse of its proposed $3.8 billion merger with JetBlue Airways in January and issues stemming from Pratt & Whitney’s Geared Turbofan engines, which grounded numerous aircraft in its fleet.

Court filings on Monday revealed that Spirit estimated its assets and liabilities to be within the range of $1 billion to $10 billion each. The airline has reached an agreement with its bondholders aimed at reducing debt and improving financial flexibility. As part of this prearranged Chapter 11 process, Spirit Airlines secured a $350 million equity investment from its bondholders and $300 million in debtor-in-possession (DIP) financing. Together with its available cash, this funding is intended to support operations throughout the bankruptcy proceedings. Spirit is also expected to be delisted from the New York Stock Exchange in the near future.

What happens to Spirit Airlines operations?

Despite the bankruptcy filing, the Spirit Airlines stated that flight operations would continue uninterrupted, and customers could book and travel as usual. Passengers should not immediately worry about disruptions to their travel plans or loyalty points.

The airline had already taken steps to mitigate its financial issues, including pilot furloughs and capacity reductions. Spirit’s exclusive use of Airbus A320 aircraft made it particularly vulnerable to the engine problems that have grounded planes across multiple airlines.

Impact on existing Spirit Airlines flights

Most flights are expected to proceed as scheduled in the near term. Major disruptions during Thanksgiving travel are unlikely, but schedule changes or cancellations could become more common as winter progresses. He suggested that travelers monitor updates from Spirit as their travel dates approach.

The Department of Transportation (DOT) has finalized rules requiring airlines to issue full refunds for flights that are canceled or significantly delayed—over three hours for domestic flights and six hours for international flights—if passengers opt not to travel.

Loyalty miles and points

Airline loyalty points are typically non-transferable, but Mann highlighted that frequent flyer programs are valuable assets that often survive bankruptcies. These programs could become part of a potential merger or acquisition. If Spirit merges with another airline, its loyalty program might be integrated with the new partner’s program.

The ownership of Spirit’s planes varies. Leased aircraft would remain under the control of their lessors, who could choose to re-lease them to Spirit or other airlines. Owned planes might be sold to raise funds, although the airline could prioritize selling other assets, such as gates or airport slots, to maintain its operational capacity.

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