Spirit Airlines has recently announced its entrance into the Chapter 11 restructuring procedure. Spirit Airlines issued an open letter to all guests to inform them about this step. Chapter 11 of the bankruptcy code gives flexibility to the Airline in modifying its operations legally. If you are a Spirit Airlines traveler, you should be aware of this recent development. Spirit’s top management has taken a transparent approach to make you aware of this situation.
Additionally, if you are worried about your purchased Spirit ticket, you can use the Spirit Airlines Cancellation Policy to get a refund on it. But do not worry, as the Airline has reaffirmed its usual operation to continue in the coming days.
What is Spirit Airlines’ Open Letter About?
Spirit Airlines has voluntarily filed for Chapter 11 bankruptcy. Spirit Airlines has been experiencing financial strains over the past few years. The Air carrier informed its passengers about the filing of the Chapter 11 Bankruptcy on August 29. The open letter addresses the concerns of travelers, along with highlighting the beginning of its restructuring process. This motivated approach by Spirit Airlines demonstrates its resilience in fighting back.
What Concerns of Travelers are addressed in Spirit’s Open Letter?
Spirit Airlines has assured travelers that it will continue with normal operations. You can continue booking Spirit’s flight tickets to obtain a high-value journey experience. According to the open letter, passengers are allowed to use the following services:
- Travelers can buy Spirit flight tickets from all available sources
- All Spirit flights will continue to operate as they did before. Till now, there has been no rightsizing of the fleet.
- The Spirit Airlines credits are still applicable for your bookings.
- Spirit Airlines loyalty points can be used as applicable.
- Saver$ club members of Spirit Airlines will continue getting the specified perks.
- Passengers are allowed to take advantage of the available benefits from the Free Spirit loyalty program.
- Your Spirit Airlines credit card will continue giving its travel perks.
Spirit Airlines has ensured that its travelers do not feel the heat of this new reorganization process under Chapter 11. After all, they are pushing back to regain their operational might to serve travelers.
What is Chapter 11 of the Bankruptcy Code that Spirit Airlines has filed for?
Chapter 11 of the Bankruptcy Code is a legal way to reorganize your business operations. Spirit’s Chapter 11 Bankruptcy filing will help it in restructuring its business operations. It is a court-supervised legal procedure. The positive aspect is that Spirit Airlines can conduct its restructuring alongside its day-to-day operations. This tool has helped every major US carrier in achieving its goals. The legal provisions of the Chapter 11 Bankruptcy Code will allow Spirit Airlines to enhance its business. If done right, this step can reposition them on the path of everlasting success.
What Changes will this Voluntary Petition bring to Spirit Airlines?
Spirit Airlines has filed voluntary Chapter 11 petitions in the US Bankruptcy Court. The bankruptcy plea has been filed in New York’s Southern District Bankruptcy Court. It will lead to:
- De-listing from NYSE (New York Stock Exchange)
- Rightsizing of Spirit’s operational fleet
- Remodeling of its flight network
Spirit Airlines has created a dedicated portal to provide all details of its restructuring process.
How much Loss is Spirit Airlines facing?
Spirit Airlines’ operational loss started during the COVID pandemic. The post-bankruptcy reorganization plan shows the serious financial strain on the Airline. Spirit Airlines suffered a net loss of $245.8 million in the last quarter. Financiers/ Passengers cast serious doubt on the future of Spirit Airlines, with some believing its extinction in the next 1 year.
What Steps is Spirit Airlines taking under the Restructuring Process?
The detailed restructuring steps have not been taken yet, but the Airline intends to focus on the following aspects.
- Optimization of the Fleet- Spirit Airlines will adjust its fleet size to align with promising demand. This efficiency will reduce losses and lease obligations. This step is being taken to generate substantial annual operating savings.
- Route Restructuring– Spirit Airlines will concentrate its flights on essential market routes. The focus is to increase connectivity in priority cities, while reducing operations in less profitable regions. Passengers can expect increased flight frequency for some destinations.
- Putting Customer-first Approach- Spirit will offer more value at every price point with its three travel options (Spirit First/ Premium Economy/ Value). The Airline will expand its premium offerings while maintaining affordable travel options for every passenger. The company can also fulfill its mission of accessibility for all travelers.
- Cost Structure Revision – Spirit Airlines will enhance its cost-efficiency model by implementing additional improvements throughout the organization. It will maintain the competitive advantage of Spirit Airlines in the industry.
What Impact will Spirit’s Shutdown have on Travelers?
You may expect a rise in fares among other air carriers if somehow Spirit becomes dysfunctional. The exit of Spirit’s budget-friendly travel option will limit the availability of affordable travel options. Other airlines will face less competition, leading to a fare increase. The merger of Spirit Air with other airlines will create the same set of problems.
Why Spirit Airlines’ Failure is Not a Writing on the Wall?
You should not write off the comeback of Spirit Airlines. CEO of Spirit Airlines, Dave Devis, stated that the Airline is pondering all aspects to regain its financial might. Some of the alternate options being considered by Spirit Airlines are:
- Add new travel routes that have higher demands.
- Sell its assets- Spirit Airlines may raise funds by selling its airport gates/ planes/ real estate.
- Bring a new dress code to attract wealthy travelers.
- Add extra legroom seats for the comfort of customers.
Wrapping Up
The story of Spirit Airlines is far from over. Spirit’s resilient approach in tackling this difficult time has given hope among investors. The new remodeling, undertaken under the court-supervised restructuring process through Chapter 11, is expected to bring its poor finances back on track. Travelers can still opt for the cancellation of their Spirit tickets. The Spirit Airlines cancellation policy ensures a hassle-free refund on the cancelled flight. If you want to complete your air travel with Spirit Airlines, contact seasoned travel experts of spiritflightdeals.com. You can complete your flight booking smoothly by contacting them at Call Us : +1-855-662-4577.
