Spirit Airlines is preparing to shutter operations, according to a report from the Wall Street Journal, and customer are sure to be wondering what this means for their future travel plans.
The budget carrier has struggled to get back on its feet after its second bankruptcy in less than a year — and now it has the added challenge of skyrocketing fuel prices amid the war in Iran.
Spirit has been unable to secure enough funding from the government and certain bondholders to keep it in business, the Journal reported.
So what does this mean for travelers with tickets for a Spirit Airline flight?
Per CBS News, Trump administration officials have been told Spirit will be shutting down operations in the next 24 hours.
“We are looking at immediate disruption to the traveling public as soon as tonight,” Katy Nastro, travel industry expert for Going, told The Post.
According to Cirium analytics, more than 900 flights are scheduled for this weekend alone, representing upward of 190,000 seats gone — not to mention the rest of the year’s flights, Nastro pointed out.
Liquidations usually happen fast, which can lead to stranded passengers, and travel experts are noting that this could happen as soon as midnight tonight, impacting tomorrow’s flights at the earliest.
“In these cases, travelers aren’t left with many options to get their money back,” Nastro warned. “Your right to a refund stands, yet if no airline exists to payout for the cancellation, travelers usually are at the end of the line to see any money, if that.”
CBS News travel editor Peter Greenberg reported that those with a Spirit Airlines ticket for a flight that hasn’t happened yet will get the money back from their credit card company under federal credit laws.
With the Fair Credit Billing Act, Nastro emphasized that travelers should not cancel anything since proof will be required to show “services not rendered, AKA Spirit no longer exists, so you cannot get the service you paid for.”
“Wait for Spirit to cancel in either case, as you have little rights to begin with, but no recourse if you cancel,” she advised.
Nastro said that rescue fares on other airlines come at a cost, though they typically are capped. Airlines have not yet shared whether or not they’ll be offering these, so those with plans to fly Spirit should keep an ear out.
“The days of the gentleman’s agreement between airlines to bail each other out with those tickets are long since over,” Greenberg warned, adding that American Airlines has told their employees that they might help Spirit travelers out, but there has been no procedure announced thus far.
At the end of the day, Spirit’s shutdown most likely means passengers will have to book on a competing airline, which means higher fares.
“There is no cherry-coating this reality,” Nastro said. “The proof is in the pudding, pointing to Delta’s increase on fares after Spirit exited Minneapolis.”
Spirit Airline’s mere presence helped push down base fares as it allowed for more routes in some markets.
“When one airline closes, another doesn’t just magically appear,” Nastro said. “Some analysts suggest that US airlines can absorb the market share without causing much disruption. That may be true if it were just other low cost carriers scooping up the remains, but in this current market with higher jet fuel, unlikely they have the financials to eat the leftovers. Less low-cost carrier options means less pricing pressure.”
Nastro noted that leisure markets like Florida, and to some extent the Caribbean, will be hit the hardest.
“Without Spirit in Fort Lauderdale, you are talking about almost a third of the marketshare wiped out, giving way to competitors to take full dominance in that airport alone and have all the pricing power,” she said.
Spirit Airlines is a South Florida-based carrier, and Florida is an affordable option for vacations and visiting friends and family, which could potentially become more expensive.
Spirit also helps with southbound traffic, which could make accessibility to the Caribbean more limited and more expensive until other carriers move into the space, if they do.
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