Spirit Airlines is making headlines this week as it has filed for Chapter 11 bankruptcy protection, sending ripples of concern through the travel community just as the busy Thanksgiving season approaches. This announcement isn't just about corporate finances; it's about the nearly 6 million travelers expected to board planes during the holiday period, raising questions about the viability of their travel plans with Spirit.
Earlier this week, Spirit revealed its bankruptcy filing, citing quarterly losses, unsuccessful merger attempts, and looming debts as key reasons for its decision. The low-cost carrier's financial woes deepened when its ambitious $3.8 billion merger with JetBlue Airways collapsed earlier this year. This merger was seen as pivotal for Spirit, potentially reshaping its market presence significantly. But as the merger fizzled, the airline faced additional challenges, namely issues related to Pratt & Whitney's Geared Turbofan engines, which have been troublesome for many airlines operating the A320 family of jets.
So, what does this mean for holiday travelers who have booked flights with Spirit? For now, it seems the situation is manageable. Robert W. Mann Jr., president of R.W. Mann and Co., and former airline executive, stated to USA Today "Most, if not all, flights should still operate as scheduled in the near term." This is encouraging news for passengers, especially those making plans around Thanksgiving, typically one of the busiest travel periods of the year.
While travelers can breathe easier about their immediate plans, Mann warns to stay alert for any notifications about potential changes to scheduled flights as the future progresses. Due to the bankruptcy filing, it’s possible later winter schedules could see cancellations or alterations, particularly around the 45-day mark post-filing, when changes might become clearer.
Flight operations are expected to continue smoothly through the bankruptcy proceedings, allowing customers to book and fly without immediate interruption. Nonetheless, passengers should remain vigilant for communications from Spirit, which will detail any changes to itineraries as their travel date approaches. Recent guidelines from the U.S. Department of Transportation mandate airlines provide full refunds for canceled flights and significant delays, which could serve as consumer protection during these uncertain times.
On the topic of loyalty programs, frequent flyers who might be concerned about their Spirit loyalty miles will find some reassurance. While frequent flyer programs typically can't be transferred, these programs are considered valuable assets and are often preserved even during bankruptcy proceedings. Mann mentioned, "That is an asset, at least from the standpoint of people who might acquire them. You’re acquiring a customer base as well." Should Spirit undergo restructuring or potentially merge with another airline during this process, there’s hope for loyalty points to survive and likely be integrated with the acquiring airline's program.
The next logical question is whether Spirit can bounce back from this difficult situation. Industry experts speculate there may be opportunities for mergers or acquisitions moving forward. Supporters of the airline might find some hope with anticipated political shifts potentially favoring consolidation within the airline industry. The recent Biden administration had rejected Spirit's proposed merger with JetBlue, but the arrival of new regulatory conditions could pave the way for revived deals.
Current operations during bankruptcy hinge on leased and owned aircraft. Spirit doesn't own all its planes; some are leased from third-party providers. If the airline retains ownership of its planes, they could be sold to generate cash for operations. Alternatively, some assets, such as airport slots, could be sold if management deems it more beneficial for future income generation.
From Oklahoma to Kentucky, travelers are left wondering about the future of Spirit flights. At present, those with existing reservations shouldn't worry. They should keep their eyes peeled for updates and changes as they move closer to their scheduled flights. Spirit's ability to recover from its financial troubles will be watched closely, as it shapes the future of travel alternatives for millions across the nation.
