• by Tanya Gazdik , November 20, 2024

Several budget airlines could benefit from Sprit Airlines' Chapter 11 bankruptcy filing.

“On an available-seat-mile basis, industry shorthand for how many potential customers can be flown over a given distance, JetBlue and Frontier will likely get the most breathing room should Spirit have to dramatically cut its capacity,” according to Quartz. “Though Deutsche Bank points out that American Airlines, Delta Air Lines, and United Airlines have a greater share of domestic-market overlap with Spirit than all but Frontier Airlines, the routes aren’t as critical to their bottom lines because they have significant international businesses.”

Travelers who have tickets booked on Spirit may need to panic. 

“The low-cost carrier, which has not reported an annual profit since 2019 and has lost more than $2.2 billion since the start of 2020, reassured its customers that flights would be taking off as scheduled and that travelers could continue to book tickets,” according to The New York Times. “Many companies, including major airlines, have emerged from Chapter 11 bankruptcy — a process that allows a company to financially restructure while still operating — on stronger footing.”

The no-frills airline lost its footing after a long run of quarterly losses. 

“Spirit's troubles deepened after the collapse of its $3.8 billion planned merger with JetBlue Airways in January and the impact of RTX's, Pratt & Whitney Geared Turbofan engines snag that grounded many of its aircraft,” according to USA Today. “The airline listed its estimated assets and liabilities in the range of $1 billion to $10 billion each, according to a court filing on Monday.”

Most, if not all, Spirit flights should operate as scheduled in the near term.

“The airline, known for its bargain fares, said it expects to emerge from bankruptcy in the first quarter of 2025, ‘even better positioned to deliver the best value in the sky,’” according to CBS News. “Industry experts attribute Spirit's financial woes in part to changing consumer preferences as they demand more amenities while flying.”