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Update 2/20/2025: Spirit's bankruptcy reorganization was approved by the courts, and Spirit Airlines plans to emerge from bankruptcy in the next few weeks.
Bankruptcy obviously has scary implications. Images of shuttered doors and empty coffers fill people's imaginations. Spirit Airlines — the most recognizable and popular low-cost airline in the U.S. — filed for bankruptcy as of Monday. In this post, we will explore what this means for the budget airline, its Free Spirit members, and travelers as a whole.
Spirit Airlines Files for Chapter 11 Bankruptcy
The iconic budget airline filed for Chapter 11 bankruptcy protection on Monday, adding another chapter (pun intended) to Spirit's tumultuous 2024 story. This comes on the heels of its mergers with JetBlue and Frontier collapsing in March and October, respectively. This move curbs the airline's mounting debt, and will hopefully provide Spirit some financial breathing room to position Spirit for success in 2025 and beyond.
Spirit expects to continue business operations as usual while it navigates the court proceedings. As a passenger, you can book and fly without any issues, and any tickets or Free Spirit points you might have will still be valid.
It's still unclear what the long-term blueprint for the carrier looks like. Historically, a majority of the larger U.S. airlines have operated at a loss, while the budget airlines would typically see much better margins. However, with the airline landscape shifting and larger airlines now seeing better profits, this is a concerning trend that leaves uncertainty about the future of the bright-yellow airline.
So, while there is no reason to panic as a Free Spirit member just yet, the question remains: Will Spirit be able to recover financially from this?
What Does Spirit’s Bankruptcy Mean for Passengers and Free Spirit Members?
The short answer? Spirit's bankruptcy won't mean a whole lot in the short term. Free Spirit members can still earn, use, and even buy Spirit points, find low-cost flights, and apply for co-branded credit cards. However, the airline's long-term viability and sustainability remain to be seen.
Back in May, Spirit CEO Ted Christie was quoted as claiming the airline industry to be “rigged” after its merger with JetBlue fell through. Those aren't words of confidence from the top dog and leader of the low-cost carrier. Are those just the words of someone bitter? Or are they foreshadowing the future of the airline and industry in general?
Bottom Line
Regardless of what the long-term future holds, Free Spirit members should continue to operate as usual in the short term. However, it'll be important to keep your finger on the pulse and see where things go. It also couldn't hurt to begin creating an exit plan in case things go south. That could mean holding off on buying Spirit points until you have an immediate use (which is our recommendation anyway) and consider using any points you have built up.
Keeping things within arm's length until the dust settles is probably your best bet. But again, there is no reason to go into panic mode — at least not yet.
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