Discount carrier Spirit Airlines has filed for Chapter 11 bankruptcy after a failed merger attempt with Frontier Airlines.
The company announced on Nov. 18 that it would seek debt reorganization under the U.S. bankruptcy code but intends to continue with flight operations. The announcement comes days after Spirit reported an approximately 12-percent decline in its most recent operating margin “due to lower total operating revenues and higher total operating expenses.”
Higher Fares for Budget Travelers
In an open letter to shareholders, Spirit said the bankruptcy filing would “position the company for success.”
“We expect to complete this process in the first quarter of 2025 and emerge even better positioned to deliver the best value in the sky,” according to the letter. “Other airlines that are operating successfully today have undertaken a similar process.”
“The most important thing to know is that you can continue to book and fly now and in the future,” the statement stressed.
In the longer term, the bankruptcy “could spell trouble for budget travelers,” according to Jesse Neugarten, CEO and Founder of Dollar Flight Club, a discount travel website.
“If Spirit goes away and takes its budget-friendly routes with it, we’re likely looking at less competition and, unfortunately, higher prices,” he said. “We estimate fares on affected routes could rise by 15-20 percent on average. We’ve seen this play out before in the transatlantic budget market—like when WOW Air collapsed in 2019, leading to a spike in transatlantic fares. While there’s a chance other budget airlines will step in eventually, travelers should brace for higher costs and stay flexible to keep finding good deals.”
Spirit has been engaged in merger talks on and off for years, including with JetBlue and Frontier. The JetBlue merger attempt was quashed in early 2024 over antitrust concerns, but negotiations with Frontier had heated up again in recent months, the Wall Street Journal reported.
However, those talks ended with no deal shortly before the ultra-low-cost carrier sought bankruptcy protection.
Spirit, the 7th-largest U.S. airline, operates flights in the U.S., Caribbean and Latin America. None of those flights are expected to be immediately affected by the Chapter 11 filing. However, the airline also recently announced plans to cut jobs and sell planes in order to shore up its finances.
—Written by Contributing Editor Robert Curley
This article first appeared at Prevue’s sister site, Recommend.com.
