Spirit Airlines Files for Bankruptcy: How Will It Impact Your Travel Plans?

 Spirit Airlines Files for Bankruptcy: How Will It Impact Your Travel Plans?

Key Points on Spirit Airlines Bankruptcy Filing

1. Bankruptcy Filing and Operations:
   Spirit Airlines has filed for Chapter 11 bankruptcy protection but plans to continue most flight operations without disruption in the short term. Travelers can still book and fly as usual.

1. Impact on Passengers:

• Passengers with existing reservations should monitor notifications from Spirit for any changes to their itineraries.
• Thanksgiving travel is unlikely to be affected, but potential schedule changes or cancellations may arise later in the winter.
• Under new Department of Transportation rules, passengers are entitled to full refunds for flights canceled or delayed by more than three hours domestically or six hours internationally.

1. Financial Challenges:
   Spirit faced prolonged quarterly losses, failed merger attempts, and engine issues with its Airbus A320 fleet, compounded by the collapse of a $3.8 billion merger with JetBlue Airways earlier this year.

1. Bankruptcy Financing and Debt Reduction:

• Spirit has secured $350 million in equity investment and $300 million in debtor-in-possession financing from bondholders to sustain operations during bankruptcy.
• The airline is also working to reduce its total debt and improve financial flexibility.

1. Frequent Flyer Miles:
   Spirit’s loyalty program is considered a valuable asset and is likely to remain intact. If Spirit merges with another airline, loyalty points may be transferred to the new carrier's program.

1. Fleet Ownership:

• Spirit’s fleet consists of both owned and leased planes.
• Leased planes may be repossessed or re-leased, while owned aircraft could be sold to raise cash during bankruptcy proceedings.
• Alternatively, Spirit may sell other assets, like airport gates and slots, to maintain its fleet.

1. Future Outlook:

• Spirit expects to be delisted from the New York Stock Exchange.
• A potential merger or acquisition could reshape the airline's future, as frequent flyer programs and customer bases remain attractive assets for potential buyers.

What Passengers Should Know

• Stay updated on your flight status through Spirit’s communications.
• Familiarize yourself with DOT refund rules in case of significant delays or cancellations.
• Frequent flyer miles are likely safe for now and may carry over in case of a merger or acquisition.