The big travel news from the last 24 hours is that Spirit Airlines has filed for bankruptcy again. It’s the second time they’ve done so in less than a year. Here’s what travelers need to know and why I wouldn’t book a ticket with them.
If you follow the travel news or subscribe to my free newsletter, then this news probably doesn’t come as a surprise. Just nine days ago, CNBC published a story titled “Spirit Airlines is on shakier ground after avoiding hard decisions in bankruptcy.” They wrote: “Spirit Airlines last week warned that it might not be able to survive a year without additional cash. Signs of strain are showing and some aircraft lessors have reached out to competitors to gauge interest in some of Spirit’s aircraft, according to people familiar with the matter. The carrier emerged from bankruptcy in March after almost four months and was met with a drop in domestic demand.”
Yesterday, Spirit Airlines issued a press release titled “Spirit Airlines Takes Action to Build a Stronger Foundation and Future for America’s Leading Value Airline.” In it, they wrote:
“Spirit intends to use the Chapter 11 process to implement the broad changes necessary to transition the Company for a sustainable future and position it to deliver the best value in the sky for years to come.” They state that this “Chapter 11 process will provide Spirit the tools, time and flexibility to continue ongoing discussions with all of its lessors, financial creditors and other parties to implement a financial and operational transformation of the Company.”
This time around, Spirit plans to redesign its network, optimize its fleet size and expand their premium options:
“Redesign its network: Spirit will focus its flying on key markets to provide more destinations, frequencies and enhanced connectivity in its focus cities. The Company will also reduce its presence in certain markets.
Optimize its fleet size: Spirit will rightsize its fleet to match capacity with profitable demand in line with the redesigned network. This will significantly lower Spirit’s debt and lease obligations and is projected to generate hundreds of millions of dollars in annual operating savings.
Effectively compete and meet evolving consumer preferences with its three travel options – Spirit First, Premium Economy and Value: Spirit will take full advantage of its lower costs to offer consumers more of what they want – value at every price point. The airline will expand the opportunities for travelers to choose premium options while remaining true to its original mission of making travel more accessible for everyone.”
Frontier Airlines executives smell blood and have jumped at the chance to go after their biggest competitors’ customers by introducing 20 new routes in major Spirit markets. Last year, Frontier failed to acquire Spirit despite several attempts but it’s looking like they might come out on top this time around.
I asked a few travel experts if they would book themselves or their clients on Spirit Airlines, given their latest bankruptcy filing. Here’s what they had to say:
“I would book on Spirit but probably not very far in advance. There’s a lot in flux right now.” ~ Brett Snyder, President and Chief Airline Dork of Cranky Flier
“It’s definitely risky to book a flight on Spirit right now. I expect the airline will take a hatchet to its route network, slashing unprofitable routes and dropping unprofitable cities as it seeks to strengthen its financial condition. If you do want to fly Spirit, it’s best to pay with a credit card. If Spirit were to shut down, you would be able to get a refund from the credit card issuer.” ~ Henry Harteveldt, airline industry analyst, Atmosphere Research Group
“I wouldn’t buy tickets more than a couple of months out. I want to be sure that I’ll be able to dispute the charge with my credit card for any transportation not honored. There’s a reason why Spirit had to draw the remainder of its revolving credit line to front cash to its card processor, and agreed to the card processor’s demands to withhold up to $3 million a day!” Gary went on to say: “In any scenario, we’re likely to see future schedule changes. So I wouldn’t count on flights booked far into the future operating as currently scheduled.” ~ Gary Leff, a travel and loyalty program specialist, View from the Wing
“Hell no… I’ve been telling people for years “Friends don’t let friends fly Spirit Airlines”. Too many horror stories of delays, and the airline not being able to provide the service for that delayed passenger.” ~ John Dekker, Travel Agent
I personally wouldn’t book a ticket on Spirit Airlines, nor would I have even before this filing because of their strict carry-on luggage rules and their past gate agents’ appalling actions.
If you have already purchased a ticket for later this year and are concerned they might not be around, it’s probably a good idea to book a back-up ticket on another carrier and preferably with miles since you can get them refunded back in full. If you don’t have enough miles, then buy a ticket using cash but purchase a fare that is either refundable or will let you cancel for a travel credit. This way you’re protected and will be able to sleep more soundly.
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