Spirit Airlines to shut down Saturday after second bankruptcy filing

Spirit Airlines is set to shut down Saturday after a second Chapter 11 filing, forcing travelers on its low-fare network to move fast on refunds, rebooking and backup plans. The carrier exited bankruptcy on March 12 after equitizing about $795 million of funded debt, taking a $350 million equity investment from existing investors, and lining up $840 million in new senior secured debt plus a $275 million revolving credit facility. It filed again on August 29 in the Southern District of New York, a sign that the earlier restructuring did not stabilize the airline for long.

For ticketed passengers, Spirit’s own rules still spell out the fastest path to cash. The airline says changes can be made online up to one hour before scheduled departure. If a flight is delayed or changed by more than two hours, travelers may choose a refund for the full trip instead of taking the new itinerary. If Spirit cancels a flight, passengers may take a refund, accept rebooking on the next available Spirit flight, or choose another Spirit departure within seven days at no extra cost. If a customer rejects the replacement or simply does not travel, Spirit says unused flights are automatically refunded to the original form of payment within seven business days.

Credit card holders have an extra layer to lean on if the airline stops flying. The Transportation Department says an airline bankruptcy does not always mean a flight is canceled, but if a carrier goes out of business or stops flying, refunds and vouchers can become complicated and may be temporarily restricted to conserve assets. If Spirit refuses to refund a canceled flight bought with a credit card, the department says travelers may be entitled to a credit from the card company under the Fair Credit Billing Act. Federal refund rules also require automatic refunds within seven business days for credit card purchases when a carrier cancels or makes a significant schedule change and the passenger rejects the alternative.

Free Spirit points are another open question for customers with balances. Spirit says points do not expire as long as members earn or redeem within 12 months, or keep an open Free Spirit credit card account. But Spirit also reserves the right to modify or terminate the program at any time without notice, and to cancel points and reward tickets in certain cases. That makes any shutdown especially risky for travelers holding points they expected to use on a future trip.

The broader hit would fall on budget-heavy routes across the United States, Latin America and the Caribbean. Spirit’s 2024 annual report said the airline served 87 destinations in 15 countries from its Dania Beach, Florida, headquarters, and generated $4.913 billion in operating revenue while posting a $1.105 billion operating loss and a $1.230 billion net loss. Losing that footprint would remove one of the most aggressive ultra-low-cost competitors from routes where price-sensitive travelers depend on every extra seat to keep fares down. Spirit’s service problems long made it a lightning rod, too: it was previously ranked worst on-time among 14 tracked airlines in one federal tally and had the highest complaint rate of any major U.S. airline.