A passenger waits for assistance at the Spirit Airlines check-in counter at Austin-Bergstrom International Airport on November 13, 2024 in Austin, Texas.
Brandon Bell | Getty Images
spirit airlines Filed for Chapter 11 bankruptcy protection, becoming the first major U.S. passenger airline to do so American Airlines 13 years ago.
However, the hallmarks of cheap travel haven’t gone away. The filing would buy Spirit time and protection to restructure so the airline can keep flying and bring in much-needed cash.
Chief Executive Ted Christie wrote to customers on Monday to assure them they could continue to book flights and use loyalty points or credits as normal.
Here’s what travelers need to know:
Why did Spirit file for bankruptcy?
Spirit Airlines has been losing money since 2019, but its financial troubles worsened after the outbreak, industry costs climbed, dozens of Airbuses were grounded due to engine recalls, and a federal judge blocked Spirit’s acquisition plan. JetBlue Airways.
The airline has been trying to renegotiate $1.1 billion in debt due next year. Year-end deadlines related to credit card processing agreements are looming.
Spirit said on Monday it had reached prearranged agreements with most of its bondholders for a “streamlined” Chapter 11 bankruptcy protection plan. It expects to exit the process in the first quarter of 2025.
Is my flight still available?
Filing for Chapter 11 bankruptcy protection does not mean the airline will cease operations. Instead, it provides protection for airlines as they restructure their operations, which often means divesting assets or parts of their operations.
“From a consumer perspective, you need to be aware of whether Spirit is going to change their schedule or if they’re going to retire any aircraft, lay off any pilots and flight attendants, and that’s going to impact the traveling public,” Henry said. He is the founder of Atmosphere Research Group, a travel consulting company.
The airline is likely to keep its flight schedule as tight as possible during the holidays, as airlines generate a lot of revenue during the peak travel season, but further cuts may not be too far away.
What are my rights if Spirit Airlines cancels my flight?
Under U.S. regulations, airline passengers are entitled to a cash refund if an airline cancels a flight and does not rebook it. Spirit Airlines said Monday it plans to keep flying, as Chief Executive Ted Christie sought to reassure passengers that their bookings would bring in needed cash during the holiday season.
However, the Department of Transportation warned bankruptcy protection May make refunds more difficult.
According to its website, “If an airline or ticket agent has filed for bankruptcy, the company may be temporarily prohibited from providing refunds and/or coupons – for example, to preserve assets.”
If an airline that has filed for bankruptcy refuses to refund your canceled or significantly changed flight, your credit card can provide a refund under the Fair Credit Billing Act, the agency said.
However, even if you get a refund, buying a last-minute ticket to replace your original flight can be expensive due to high demand and scarcity of seats. Harteveldt recommends always purchasing tickets with a credit card, which provides customers with more cancellation protection than debit cards or cash. If travelers are concerned, they can also book refundable tickets on other airlines, although this can also be very expensive.
travel insurance possible Prepaid expenses can also be paid if bankruptcy changes the airline’s flights.
What happens next?
That remains to be seen. Spirit is expected to exit Chapter 11 bankruptcy protection in the first quarter of next year. Through this process, airlines can become smaller, more cost-effective airlines. Other airlines, shortage aircraft, and may acquire some of Spirit Airlines’ assets.
Spirit reaches merger agreement with other discounters border before JetBlue launched a rival bid. Frontier and Spirit may try to merge again, especially since some industry members believe the incoming Trump administration will be relatively deal-friendly.
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