Spirit Airlines filed for bankruptcy. What does it mean for your DFW Thanksgiving flight?
Spirit Airlines attracted customers through their low prices. However, they are now filing for Chapter 11 bankruptcy.
The low-fare airline said it had no choice but to take these measures for a more sustainable future. Spirit has had trouble gaining its footing again since the pandemic and after its failed merger with Jet Blue in January, according to Reuters.
“The restructuring is expected to reduce Spirit’s debt, provide increased financial flexibility, position Spirit for long-term success, and accelerate investments, providing Guests with enhanced travel experiences and greater value,” says Spirit Airlines in a statement.
Spirit operates as “ultra low cost,” meaning that those who travel with Spirit buy purely their plane ticket without added amenities. Travelers do not get complimentary snacks or drinks and must pay for a carry-on bag. However, this option allows people to fly at an affordable price.
Luckily, those who fly Spirit do not have to worry about losing this low-cost option.
What is Chapter 11 bankruptcy?
According to the United States Courts, Chapter 11 bankruptcy is also referred to as “reorganization bankruptcy.”
“Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money,” says U.S. Courts.
The last major airline to file for bankruptcy was American Airlines in 2011 due to high fuel costs. However, according to the New York Times, most companies that file for Chapter 11 bankruptcy emerge stronger from it.
Spirit Airlines hasn’t reported a full year of profit since 2019, according to Reuters. And in 2024, they have lost around $360 million in just the first half of the year.
What does bankruptcy mean for Spirit Airlines customers?
Spirit Airlines CEO Ted Christie said in an email to travelers that bookings will not be affected, and customers can continue to use points, credits, and tickets as normal.
As far as the company’s 12,800 employees, Reuters reports that “Spirit’s flight attendants union said the bankruptcy filing does not change pay, benefits or working conditions for its members. It told flight attendants to continue to work as planned.”
However, the New York Times reported in April that Spirit is furloughing 260 pilots and selling planes to cut costs.
The Airbus A320 planes, with Pratt & Whitney engines, make up around 200 of Spirit’s fleet. However, it recently came out that one in ten of these planes has engine defects, which cuts Spirit’s fleet down. Spirit will receive between $150 and $200 million of compensation from Pratt & Whitney. The airline said it expected to begin 2025 with around 35 planes on the ground, hopefully growing to 67.