Spirit Airways Information for Chapter — What It Means for Passengers

Spirit Airways, recognized for its low-cost “naked fares” and charges for every part from carry-on baggage to water, filed for chapter in New York early Monday morning.

The airline’s CEO Ted Christie, in a letter to vacationers, wrote that clients “can proceed to ebook and fly” on Spirit Airways because it restructures. All tickets, credit, and loyalty factors are unaffected, he added. Vacationers can study extra on a particular chapter web site the airline created, Spirit Go Ahead.

Spirit filed what is named a “prepackaged” chapter, or the place the service and its collectors have already agreed to a restructuring plan. Spirit’s plan contains slashing debt by almost $800 million and shrinking the airline. This contains an already agreed to sale of airplanes that quantity to about 10% of its 200-plane-strong fleet.

Spirit’s path to chapter had many twists and turns. The instant trigger is a billion-dollar-plus debt invoice due in 2025 that it was underneath stress to handle. However the submitting would have been prevented if its merger with JetBlue Airways had gone forward as deliberate. That deal collapsed this previous March after it was blocked by a federal choose. Spirit can also be affected by high quality points with the Pratt & Whitney engines on lots of its Airbus jets resulting in the grounding of dozens of planes.

Vacationers with tickets on Spirit are unaffected. As Christie stated, the airline continues to function its schedule as deliberate. Flight monitoring web site FlightRadar24 confirmed greater than 90 Spirit flights within the air this morning after the chapter announcement.

Modern airline bankruptcies not often contain a full shutdown and liquidation. American Airways, the final main U.S. service to restructure underneath Chapter 11, operated its full schedule — and even expanded its community — after it filed for chapter in November 2011.

Spirit, nevertheless, is extensively anticipated to shrink as a part of its restructuring. It already plans to chop its schedule by roughly 20% in comparison with final yr over the past three months of 2024, and Wall Avenue analysts anticipate additional cuts subsequent yr. 

Conor Cunningham, an airline analyst at Melius Analysis, wrote in a report Monday shared with Journey + Leisure that the expectation is Spirit will shrink its schedule by one other 30-35% subsequent yr.

A 35% schedule reduce would see Spirit, presently the seventh largest U.S. airline, fall to eighth in measurement behind Frontier Airways, schedule information from aviation analytics agency Cirium Diio exhibits.

Vacationers contemplating reserving flights on Spirit must be conscious that modifications are coming to the airline’s schedule subsequent yr. A flight that’s on sale now might be canceled however, if that occurs, Spirit remains to be required to supply a full refund or different flight choices to vacationers even because it restructures in chapter.

And whereas Spirit’s restructuring plan doesn’t embrace a merger with one other airline, many assume a deal may nonetheless occur. Frontier, JetBlue, and United Airways may all be excited about buying all, or items, of Spirit for the precise value by chapter, wrote Cunningham.

“We anticipate to finish this course of within the first quarter of 2025 and emerge even higher positioned to ship the most effective worth within the sky,” Christie stated on Monday. “Different airways which can be working efficiently as we speak have undertaken the same course of.”