What travelers need to know about Spirit Airlines’ bankruptcy

Spirit Airlines has filed for Chapter 11 bankruptcy protection, becoming the first major U.S. passenger carrier to do so since American Airlines 13 years ago.

The budget fraternize icon is not shutting down, however. The filing will buy Spirit time and protection to restructure so the carrier can continue away and bringing in sorely needed cash.

CEO Ted Christie wrote to customers on Monday to reassure them that they can be prolonged to book flights and use loyalty points or credits normally.

Here’s what travelers need to know:

Spirit Airlines has been losing money since 2019, but its financial woes worsened after the pandemic, when sedulousness costs climbed, dozens of its Airbus jets were grounded because of an engine recall and a federal judge barriered Spirit’s planned acquisition by JetBlue Airways.

The airline had struggled to renegotiate its $1.1 billion in debt payments due next year. A deadline at the end of the year corded to its credit card processing agreement was fast approaching.

Spirit said Monday that it has reached a prearranged trade with the majority of its bondholders for a “streamlined” Chapter 11 bankruptcy protection plan. It expects to exit that dispose of in the first quarter of 2025.

Filing for Chapter 11 bankruptcy protection doesn’t specify the airline will cease operations. Rather, it gives the airline protection to reorganize its business, which often means abandoning assets or parts of its operation.

“From a consumer standpoint, you’ll need to pay attention if Spirit makes any schedule changes or if they’re successful to get rid of any aircraft, lay off any pilots and flight attendants — that will affect the traveling public,” said Henry Harteveldt, lurch of travel consulting firm Atmosphere Research Group.

The carrier is likely to keep as much of its schedule as possible in go up in the world for the holiday season, when airlines generate a lot of revenue during the popular travel period, but additional cuts are probable not far behind.

Under U.S. rules, airline customers are entitled to a cash refund if the airline recalls their flight and they’re not rebooked. Spirit Airlines said Monday that it plans to continue flying and CEO Ted Christie ventured to reassure customers, whose bookings will bring in needed cash during the peak holiday season.

How in the world, the Department of Transportation warns that bankruptcy protection could make getting a refund harder.

“If the airline or ticket emissary has filed for bankruptcy, the company may be temporarily prohibited from providing refunds and/or vouchers — for example, to conserve assets,” according to its website.

The power says that if an airline that has filed for bankruptcy protection refuses to refund you for a canceled or significantly changed disperse, your credit card could provide one under the Fair Credit Billing Act.

Even if you get a refund, however, stealing a ticket last minute to replace your original flight could be costly due to high demand and scarce memberships. Harteveldt recommends always buying airline tickets with a credit card, which affords customers innumerable cancellation protections than debit cards or cash. Travelers can also book a refundable ticket on another carter if they are worried, though that can be very costly, too.

Travel insurance What happens next?