Spirit Airlines, the largest low-cost airline in the United States, filed for bankruptcy on Monday. The announcement comes after years of trouble for the Florida-based company known for its low-cost flights. Spirit was unable to recover from the COVID-19 pandemic, primarily due to high operating costs and increased competition. The company has suffered losses of more than $2.5 billion since 2020 and has racked up large debts.
The bankruptcy process should help restructure the company and strengthen its financial position. However, the uncertainty surrounding the bankruptcy may cause some passengers to look for other flights before the upcoming holiday season.
What happens to already booked tickets and loyalty points? For the moment, activity continues as normal. Spirit says it will continue operating as usual during the bankruptcy process and that passengers will be able to book and fly without interruption. All tickets, credits and points remain valid, as do airline-affiliated credit cards and member benefits.
Assuring customers that bankruptcy will not affect their plans is critical to a company’s short-term sustainability. It is estimated that 34.3 billion mileage points remain to be redeemed, worth approximately $105 million.
Will there be fewer flights? Although Spirit maintains that scheduled flights will not be affected, the airline had already warned of reducing its capacity before filing for bankruptcy. In the coming months, Spirit plans to reduce the number of flights by 20% compared to last year. The company was also forced to ground dozens of Airbus planes to repair their engines.
The reduction in flights, according to analysts, will support Spirit’s prices, but to a greater extent it will help the company’s competitors. Experts at Deutsche Bank and Raymond James say airlines like Frontier, JetBlue and Southwest will likely benefit because they often compete with Spirit on the same routes.
Where does the spirit fly? The airline operates numerous destinations in the United States, as well as Latin America and the Caribbean. The company’s main center is located at Fort Lauderdale International Airport (Florida). Spirit is the largest airline at the airport, accounting for 30% of all passengers in August, according to Department of Transportation data.
The company’s second-largest hub is also in Florida, at Orlando International Airport, where Spirit ranks second in passengers behind Southwest, ahead of Delta, Frontier and American Airlines. The company is also active in Las Vegas, Atlanta and Los Angeles. Spirit’s main service centers are located in Detroit and Houston.
It’s worth noting that Spirit regularly ranks among the airlines with the highest levels of customer complaints, according to the Department of Transportation.
What other companies offer cheap tickets? While Spirit remains the largest low-cost airline in the United States, it faces increasing competition. One reason for its recent losses is that other airlines have begun offering their own versions of low-cost tickets with no additional fees. Spirit’s biggest competitors include low-cost airlines such as Frontier and JetBlue, which have attempted to merge with Spirit. However, a lawsuit this year blocked their $3.8 billion deal. The court sided with the Justice Department and said the deal would raise prices for passengers who value low fares.
Additionally, major airlines also offer competitive fares. For example, Southwest’s “Wanna Get Away” tickets and United and Delta’s Basic Economy options are becoming increasingly popular among budget-conscious travelers.
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