Spirit Airlines files for bankruptcy: How will it affect your travel plans?


Spirit Airlines files for bankruptcy: How will it affect your travel plans?

Published 18 November 2024 Spirit Airlines officially filed for bankruptcy protection Monday after the pioneer of no-frills travel in the U.S. struggled with a long run of quarterly losses, failed merger attempts and looming debt maturities. Spirit's troubles deepened after the collapse of its $3.8 billion planned merger with JetBlue Airways in January and the impact of RTX's, Pratt & Whitney Geared Turbofan engines snag that grounded many of its aircraft. The airline listed its estimated assets and liabilities in the range of $1 billion to $10 billion each, according to a court filing on Monday. Spirit has entered into an agreement with its bondholders that is expected to reduce total debt and provide increased financial flexibility. The airline, as part of the prearranged Chapter 11 bankruptcy protection, has received commitment for a $350 million equity investment from existing bondholders. Existing bondholders will also provide $300 million in debtor-in-possession (DIP) financing, which, together with available cash, is expected to support the airline through the Chapter 11 process. Spirit expects to be delisted from the New York Stock Exchange in the near term. The carrier said it expects to continue its flight operations through the proceedings and customers can book and fly without interruption. Passengers shouldn't worry too much about their travel plans or frequent flyer miles immediately. "In the short term, it will be just smaller," Robert W. Mann Jr., a former airline executive officer and current president of R. W. Mann and Co., an independent airline consultancy, told USA TODAY. "If you’ve already gotten notice of your flight canceled or had to be rebooked, you’ve already gotten that notice." Spirit previously announced pilot furloughs and capacity cuts to address ongoing financial issues, as well as well-documented engine problems that have grounded many Airbus A320s across airlines. Spirit exclusively flies planes in the A320 family so it has been heavily impacted by these faults and was already capping capacity as a result. Here's what passengers need to know as Spirit enters bankruptcy.