Spirit Airlines Bankruptcy: What to Know – NerdWallet

Spirit Airways is getting ready to file for chapter safety after merger talks with Frontier Airways collapsed, based on a Wall Avenue Journal report. This comes after a merger settlement between Spirit Airways and JetBlue Airways fell by earlier in 2024.

In October, the Journal reported that negotiations between the airline and its collectors have been targeted on a Chapter 11 chapter submitting. That type of chapter permits an organization to proceed working whereas lowering prices and making funds towards restructured debt.

As negotiations progress, right here’s what the airline’s potential chapter would possibly imply for you.

The reply is “possibly.” An airline submitting for chapter doesn’t essentially imply your flight shall be canceled. If Spirit recordsdata for Chapter 11 chapter, they’ll restructure their debt funds and be permitted to proceed working whereas reducing prices. These value reductions might imply fewer routes, resulting in potential cancellations.

However efficiently restructuring the debt is “not anticipated to impair” clients, based on a submitting the airline made with the U.S. Safety and Trade Fee on Nov. 12.

The precise final result stays to be seen. In case your ticket does find yourself getting canceled, contact the airline to know your choices for a refund or rebooking.

In October, Spirit reduce 30 routes throughout the USA. Vacationers on canceled flights have been in a position to contact the airline for a full refund or a rebooking on a special flight.

Since then, the airline hasn’t introduced any extra route cancellations. That might change, relying on the end result of the debt negotiations.

It is too early to say. Free Spirit is the loyalty program for Spirit Airways. If the airline pursues Chapter 11 chapter, it should ask the court docket to grant sure sorts of aid to proceed common operations, possible together with the loyalty program.

Assuming the request is granted, the loyalty program will proceed and your factors will stay. There’s some precedent for this: In 2011, American Airways filed for Chapter 11 chapter, and its loyalty program was permitted to proceed with out interruption.

Nonetheless, the ultimate final result would rely upon Spirit’s debt negotiations throughout chapter proceedings.

If Spirit begins working underneath chapter protections, it should possible need to honor your voucher.