Pack your parachutes! Spirit Airlines crash-lands into bankruptcy

Spirit Airlines has filed for Chapter 11 bankruptcy amid ongoing financial struggles, having lost more than $2.2 billion over the past five years, according to The New York Times. Spirit has assured travelers in an open letter to customers that flights will continue during the proceedings, with existing tickets, credits, and loyalty points remaining valid. Travelers should be aware of possible schedule changes, especially after the year-end, as the airline works through the bankruptcy process.

This move comes after a failed $3.8 billion merger with JetBlue Airways, reported USA Today, who also mentioned that Spirit Airlines expects to be removed from the New York Stock Exchange in the ‘near term.’ 

Additionally, Spirit Airlines has experienced operational challenges, including engine issues with its Pratt & Whitney Geared Turbofan engines, grounding several of its Airbus A320 aircraft. Compounding these problems is intense competition in the ultra-low-cost carrier market. According to The New York Times, Spirit's liabilities sit at $9 billion. 

Robert W. Mann Jr., an airline consultancy expert, told USA Today that cancellations and changes are possible, particularly around the later holiday season, though Thanksgiving travel should not be affected. 

"It is quite possible that by the 45-day mark, which is kind of the end of the year, that we may have some other changes," Mann said in an interview with USA Today. However, new Department of Transportation rules ensure refunds for significant delays or cancellations are available if travelers opt not to fly.

Mann also told USA Today that frequent flyer programs might survive bankruptcy, retaining value as they represent an asset and a customer base beneficial for potential buyers.