Spirit Airlines bankruptcy: What travelers need to know

Florida expert on Spirit bankruptcy: What travelers need to know

Florida Tech. associate professor R. Tolga Turgut joined FOX 35 News+ to discuss Spirit Airlines bankruptcy announcement, what it means for passengers immediately and in the long term.

Florida - Spirit Airlines filed for Chapter 11 bankruptcy protection on Monday morning, following months of uncertainty about its future as proposed mergers with JetBlue and Frontier did not pan out.

The airline has already announced that it would sell some planes and cut staff to save money amid the restructuring. It has also reportedly secured millions in funding. It expected to be delisted from the New York Stock Exchange amid the restructuring.

If you have a Spirit flight coming up ahead of the holidays, or are looking to book a flight, here is what travelers need to know:

What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy protection is sometimes known as "reorganization" bankruptcy and allows a corporation or partnership to propose a reorganization plan to get the business financially on better footing and to pay its creditors.

Here's how the USCourts.gov describes it: "A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy. Usually, the debtor remains "in possession," has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money. A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements."

Is Spirit Airlines going out of business?

Not at this point, no. The Ch. 11 filing allows Spirit Airlines to reorganize its business, list out its debts, and hopefully pay its creditors overtime.

"I am pleased we have reached an agreement with a supermajority of both our loyalty and convertible bondholders on a comprehensive recapitalization of the Company, which is a strong vote of confidence in Spirit and our long-term plan," said Ted Christie, Spirit's President and Chief Executive Officer. "This set of transactions will materially strengthen our balance sheet and position Spirit for the future while we continue executing on our strategic initiatives to transform our Guest experience, providing new enhanced travel options, greater value and increased flexibility. I'm extremely proud of the Spirit team's hard work and dedication, which is key to our sustained progress in advancing our business and delivering for our Guests."  

I have a ticket booked on Spirit, can I still use it? Can I still book flights on Spirit? Will my flight be canceled?

Spirit Airlines said it expected its business to continue to operate normally as it navigates the court process. People will still be able to fly on Spirit, book future flights, and use their loyalty points.

"Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal," Spirit said.

"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."

Flights, like with any airline, may be delayed or canceled for a variety of reasons, including weather, mechanical issues, etc. Click here to check the status of your Spirit flight.