This morning, Spirit Airlines “announced that it has entered into a restructuring support agreement (the “RSA”) supported by a supermajority of Spirit’s loyalty and convertible bondholders on the terms of a comprehensive balance sheet restructuring. The restructuring is expected to reduce Spirit’s debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value.”
The Wall Street Journal broke the news last week that the airline, based in Dania, Florida, was planning to file bankruptcy six days ago so it’s not a surprise. However, travelers who have already purchased tickets, especially for the upcoming holidays, are understandably worried about their flights.
The good news is that Spirit Airlines and travel experts believe that they shouldn’t be worried. Spirit Airlines said in their statement today that, “Spirit expects to continue operating its business in the normal course throughout this prearranged, streamlined chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal. The chapter 11 process itself will not impact Team Member wages or benefits, which are continuing to be paid and honored for those employed by Spirit. Vendors, aircraft lessors and holders of secured aircraft indebtedness will continue to be paid in the ordinary course and will not be impaired.”
The Washington Post today interviewed my friend and travel analyst Henry Harteveldt, president of Atmosphere Research Group, who said, “I hate to say this, but in the airline industry, bankruptcies are like the common cold. Everybody goes bankrupt at some point, it seems like.”
Henry is right. Since 2000, more than 70 U.S. airlines have filed for bankruptcy including American, Delta and United. Henry also told the Post that, “Just because an airline is bankrupt doesn’t mean it’s any less safe to fly, and Spirit still is going to do what they can to operate reliably, on time and all that.”
The one thing that might change are the routes they service. They will most likely cut the ones that aren’t profitable. But for now, if you have a ticket to fly Spirit, you shouldn’t be too worried about the plane not departing because of the bankruptcy filing. Instead, you should be worried about how little legroom they offer and if the gate agent is going to charge you $99 to use the overhead bin for your carry-on bag. And if you are flying Spirit, (or Frontier or Allegiant Airlines), this is the bag you need so you don’t get charged extra.
KEEP READING:
–Don’t fly Frontier Airlines unless you know this
–Frontier Airlines pilot handcuffed and arrested just before plane pushes back at IAH
–Frontier Airlines worker loses it with passengers involuntarily bumped from flight at Denver International Airport
–Flying Spirit, Frontier or Allegiant Airlines? This is the bag you need so you don’t get charged extra
–Frontier Airlines passenger foolishly jokes about exit row responsibilities and is escorted off plane in handcuffs
–Infuriating: Frontier Airlines busted for incentivizing gate agents to enforce outrageous baggage fee
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