For years, its bright yellow planes have been a staple at airports near beaches, theme parks and the Las Vegas Strip, and a vessel for price-conscious customers to fly on a budget.
But with the holiday season just weeks away, there are real concerns about the future of Spirit Airlines.
At the end of August, the ultra-low-cost airline filed for Chapter 11 bankruptcy for the second time in less than a year.
The company will continue to operate as it reorganizes and restructures, and has expressed confidence in its path forward.
But some industry analysts and financial experts fear the airline faces a bleaker financial outlook than any other major U.S. airline in decades.
“It’s a pretty negative outlook for them,” said former airline executive Ahmed Abdelghany, associate dean at Embry-Riddle Aeronautical University. “They lost a lot of consumer confidence.”
In recent weeks we have seen Spirit withdraw from the cities it servescutting routes and furloughing flight attendants, all while trying to reassure consumers. with new credit card benefitsBonus points and their discounted rate features.
Now with Thanksgiving and Christmas reservations in full swingConsumer response may be the ultimate test, and questions abound.
If I book on Spirit, will the flight take off? Will travelers receive a refund if their flight is cut? And what will Spirit’s problems mean for travelers, whether they fly with the discount airline or not?
Reward your inbox with TPG’s daily newsletter
Join over 700,000 readers to receive breaking news, in-depth guides, and exclusive offers from TPG experts.
We will try to answer as many questions as we can.
What happened to Spirit Airlines?
Think of Spirit’s problems as a kind of perfect storm.
In the wake of the coronavirus pandemic, the entire U.S. low-cost airline industry has faced its challenges: Consumers have flocked to large network airlines, with their lie-flat seats, strong loyalty programs and long-haul flights.
But Spirit has also faced mounting debt, a failed merger attempt and, in a problem beyond its control, engine problems that grounded many of its planes.
And its financial prospects only became bleaker after the Dania Beach, Fla.-based airline emerged from its first bankruptcy this springAs consumers adjusted spending and lower rates reduce airline profits.
Spirit reentered Chapter 11 on Aug. 29, but not before executives shared “substantial doubts” in a federal report. presentation (PDF link) about your ability to continue operating if their prospects did not improve.
What do Spirit’s problems mean for consumers?
That brings us to the million-dollar question: Is it risky to book a flight on Spirit if you’re planning a vacation or a flight home?
It’s complicated.
Everything is as usual, for now
For one thing, if you went to the airport today to catch a Spirit flight, you probably wouldn’t notice anything unusual.
“I think as a consumer you should feel relatively safe,” said Chris Anderson, who studies the airline industry from his faculty position at Cornell University’s SC Johnson College of Business.
smaller network
“At the same time,” Anderson added, “there will be a lot of…uncertainty or volatility in your network.”
That is, flight cuts.
As of Oct. 6, Spirit was expected to operate 28% fewer flights in the fourth quarter than a year ago, according to data from aviation analytics firm Cirium.
Ok…so are holiday flights safe?
Chances are, if your flight has already been canceled, you probably already know it. and they are owed a refund.
Furthermore, while the Spirit announced 40 planned route cuts Last week, executives said the company did not No plans to leave more cities in the near future.
While nothing is guaranteed, that could bode well for customers considering Spirit flights between now and the end of the year.
Could Spirit close in 2026?
In the long term, many questions remain.
Last week, Spirit celebrated a “significant step” towards the stabilization of the company, by signing an agreement with the Irish company that leases many of its aircraft.
However, prior to that deal, analysts at Raymond James considered it “very likely” that Spirit could be forced to enter Chapter 7 liquidation in early 2026.
In that scenario, the airline would likely cease operations entirely, perhaps abruptly grounding its planes.
That risk has been reduced with last week’s deal, industry analyst Savanthi Syth told TPG.
But “how long this will allow Spirit to buy out and its ability to survive,” he said, will depend on the airline reaching additional agreements with its unions and partners.
“I think it’s very likely,” Syth added, “that the Spirit will be significantly smaller at the end of this process.”
For this, Spirit on Friday said it would get rid of more than 100 planes in a move that is expected to save the company hundreds of millions of dollars a year.
What you need to know if you book Spirit Airlines flights
Either way, there are a few things travelers should know.
DOT Refund Rules
If you book a Spirit flight and it is canceled, for whatever reason, you should still have protections.
For starters, the US Department of Transportation rules. ensure timely refunds to customers when an airline cancels their flight.
And Cornell’s Anderson believes travelers who book Spirit tickets would get their money back, even if the airline’s finances someday lead to a worst-case scenario of shutting down operations.
“I think consumers would be satisfied,” he said. “I think we have checks and balances in place.”
Read more: Getting a refund for a canceled or delayed flight: What you need to know in 2025
Should Spirit customers purchase travel insurance?
How about a travel insurance plan to be safer? After all, some plans cover an airline’s financial default.
New bookings likely wouldn’t be eligible for that coverage, said Chrissy Valdez, senior director of operations at insurance marketplace Squaremouth.
That’s because Spirit’s bankruptcy would likely count, at this point, as a “known event,” similar to a pre-existing condition.
Travel credit cards with insurance
However, savvy travelers with a credit card that has built-in travel insurance might have better luck, as long as they use that card to book their trip.
“Many credit cards with built-in travel protections contain trip cancellation and interruption coverage and can sometimes cover financial insolvency or default by a travel provider,” Valdez said, although he cautioned that each policy is different.
These are some of our Favorite credit cards with travel insurance..
Read more: Should you get travel insurance if you have credit card protection?
Book with credit card, regardless
In any case, we recommend booking Spirit flights (and all flights, in fact) with a credit card, and not just to earn points.
If all other reimbursement efforts fail, federal law could be on your side.
The Fair Credit Billing Act gives consumers the right to dispute credit card charges for services paid for but not provided, so this could be an alternative way to recover money paid for a flight that doesn’t take off.
What happens to Free Spirit points?
Technically, airlines control your frequent flyer rewards, and if the airline went into liquidation, the points would likely cease to exist along with the airline.
However, that wouldn’t stop a competitor from stepping in to try to win over customers who had flown with Spirit.
We may see other airlines offer points or status matches to Free Spirit loyalists. something that the main competitor Frontier Airlines has already ventured into – but there would be a lot of uncertainty in this area.
What a smaller Spirit could mean for airline tickets
You don’t have to be a Spirit frequent flyer to feel the impact of the airline becoming a smaller player at airports across the country.
“Even if you never fly with Spirit, you owe them a debt of gratitude for the cheaper fares on the airlines you fly with,” said Scott Keyes, founder and chief flight expert at Goingpointing to research showing that competing airlines have historically lowered prices by an average of 19% on routes launched by Spirit.
“In a world without Spirit, Delta can make people pay $300 or more for a flight from New York City to Miami,” Keyes said. “But when Spirit offers the same route for $49, it forces Delta to lower its fares or risk losing customers.”
Related reading:
