Spirit Airlines Bankruptcy: What to Know – NerdWallet

Spirit Airlines is preparing to file for bankruptcy protection after merger talks with Frontier Airlines collapsed, according to a Wall Street Journal report. This comes after a merger agreement between Spirit Airlines and JetBlue Airlines fell through earlier in 2024.

In October, the Journal reported that negotiations between the airline and its creditors were focused on a Chapter 11 bankruptcy filing. That form of bankruptcy allows a company to continue operating while reducing costs and making payments toward restructured debt.

As negotiations progress, here’s what the airline’s potential bankruptcy might mean for you.

The answer is “maybe.” An airline filing for bankruptcy does not necessarily mean your flight will be canceled. If Spirit files for Chapter 11 bankruptcy, they’ll restructure their debt payments and be permitted to continue operating while cutting costs. Those cost reductions could mean fewer routes, leading to potential cancellations.

But successfully restructuring the debt is “not expected to impair” customers, according to a filing the airline made with the U.S. Security and Exchange Commission on Nov. 12.

The exact outcome remains to be seen. If your ticket does end up getting canceled, contact the airline to understand your options for a refund or rebooking.

In October, Spirit cut 30 routes across the United States. Travelers on canceled flights were able to contact the airline for a full refund or a rebooking on a different flight.

Since then, the airline hasn’t announced any additional route cancellations. That could change, depending on the outcome of the debt negotiations.

It’s too early to say. Free Spirit is the loyalty program for Spirit Airlines. If the airline pursues Chapter 11 bankruptcy, it will ask the court to grant certain types of relief to continue regular operations, likely including the loyalty program.

Assuming the request is granted, the loyalty program will continue and your points will remain. There’s some precedent for this: In 2011, American Airlines filed for Chapter 11 bankruptcy, and its loyalty program was permitted to continue without interruption.

However, the final outcome would depend on Spirit’s debt negotiations during bankruptcy proceedings.

If Spirit begins operating under bankruptcy protections, it will likely have to honor your voucher.