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Spirit Airlines in bankruptcy: What consumers should know about booking flights
Sean Cudahy is an aviation reporter covering news about airlines, frequent flyer programs and consumer travel issues.
October 6, 2025 • 9 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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Quick summary
Spirit Airlines has entered Chapter 11 bankruptcy for the second time in a year but continues to operate as it restructures.
The airline has reduced its network, cut routes and furloughed staff, raising concerns about the reliability of future flights.
Travelers are protected by federal refund rules if Spirit cancels their flight, and booking with a credit card offers additional dispute protections.
Spirit's financial instability could impact airfare industry-wide, as its presence has historically helped keep fares lower on competing airlines.
What to consider
Recent bookings on Spirit may face increased risk of schedule changes or route cancellations, especially during the holiday season.
Travel insurance policies may not cover Spirit's financial default, as its bankruptcy is now considered a known event.
Unused loyalty points with Spirit could become worthless if the airline ceases operations, though competitors may offer limited compensation or status matches.
What you'll miss from the article
A detailed explanation of refund rights, travel insurance nuances and the broader effects of Spirit's troubles on airfares and loyalty programs.
Generated by AI with support from our editorial team.
For years, its bright-yellow planes have been a staple at airports near beaches, theme parks and the Strip in Las Vegas — and a vessel for price-conscious customers to fly on a budget.
But with the holiday season now just weeks away, there are real concerns about the future of Spirit Airlines.
The company will keep operating while it reorganizes and restructures, and has voiced confidence in its path forward.
But some industry analysts and financial experts fear the airline faces a gloomier financial outlook than any major U.S. airline has in decades.
“It’s pretty much a negative picture for them,” said former airline executive Ahmed Abdelghany, associate dean at Embry-Riddle Aeronautical University.“They lost a lot of confidence from the consumer.”
Spirit Airlines at Dallas Fort Worth International Airport (DFW). SEAN CUDAHY/THE POINTS GUY
Recent weeks have seen Spirit pull out of cities it serves, slash routes and furlough flight attendants, all while trying to reassure consumerswith new credit card perks, bonus points and its hallmark discounted fares.
Now, with Thanksgiving and Christmas bookings in full swing, how consumers respond may be the ultimate test — and questions abound.
If you book on Spirit, will the flight take off? Will travelers get a refund if their flight gets cut? And what will Spirit’s woes mean for travelers, whether they fly with the discounter or not?
We’ll try and answer as many questions as we can.
What happened to Spirit Airlines?
Think of Spirit’s problems as a perfect storm, of sorts.
In the wake of the coronavirus pandemic, the entire U.S. low-cost airline industry has faced its challenges: Consumers have flocked to large network carriers, with their lie-flat seats, robust loyalty programs and long-haul flights.
But Spirit has also faced mounting debt, a failed merger attempt and — in a problem beyond its control — engine problems that grounded many of its planes.
Spirit reentered Chapter 11 on Aug. 29, but not before executives shared “substantial doubt” in a federal filing (PDF link) about its ability to keep operating if its outlook didn't improve.
What do Spirit’s woes mean for consumers?
That brings us to the million-dollar question: Is it risky to book a flight on Spirit if you’re planning a vacation or holiday flight home?
It’s complicated.
Business as usual — for now
On one hand, if you went to the airport for a Spirit flight today, you probably wouldn’t notice anything unusual.
“I think as a consumer, you should feel relatively safe,” said Chris Anderson, who studies the airline industry from his faculty post at Cornell University’s SC Johnson College of Business.
Smaller network
“At the same time,” Anderson added, “There’s going to be a lot of ... uncertainty or volatility in their network.”
Meaning, flight cuts.
As of Oct. 6, Spirit was set to operate 28% fewer flights in the fourth quarter than it did a year ago, according to data from aviation analytics firm Cirium.
OK ... so are holiday flights safe?
Chances are, if your flight has already been canceled, you probably already know about it — and are due a refund.
Also, while Spirit did announce 40 planned route cuts last week, executives said the company did not plan to exit any more cities in the near future.
While nothing is guaranteed, that could bode well for customers eyeing Spirit flights between now and the end of the year.
Holiday decorations at New York's LaGuardia Airport (LGA). SEAN CUDAHY/THE POINTS GUY
Could Spirit shut down in 2026?
In the long term, there remain plenty of questions.
Last week, Spirit celebrated a “significant step” toward stabilizing the company, inking a deal with the Irish company that leases many of its planes.
Before that deal, however, analysts at Raymond James considered it “highly likely” that Spirit could be forced into Chapter 7 liquidation by early 2026.
In that scenario, the airline would likely cease operations altogether, perhaps grounding planes abruptly.
That risk has been reduced by last week's deal, industry analyst Savanthi Syth told TPG.
But “how long this buys Spirit, and its ability to survive,” she said, will hinge on the airline striking additional deals with its unions and partners.
“I think it is highly probable,” Syth added, “that Spirit is significantly smaller at the end of this process.”
What to know if you're booking Spirit Airlines flights
However this turns out, there are some things travelers should know.
DOT refund rules
If you book a Spirit flight and it gets canceled — whatever the reason — you should still have protections in place.
For starters, U.S. Department of Transportation rules guarantee timely refunds to customers when an airline cancels their flight.
And Anderson, of Cornell, believes travelers who book Spirit tickets would get their money back — even if the airline’s finances someday led to a worst-case-scenario shuttering of operations.
“I think consumers would get made whole,” he said. “I think that we have the checks and balances in place.”
What about a travel insurance plan, to be extra safe? After all, some plans cover financial default by an airline.
New bookings likely wouldn't be eligible for that coverage, said Chrissy Valdez, senior director of operations at insurance marketplace Squaremouth.
That's because Spirit's bankruptcy would probably count, at this point, as a "known event," akin to a preexisting condition.
Travel credit cards with insurance
However, savvy travelers with a credit card that has built-in travel insurance might have better luck — as long as they use that card to book their trip.
“Many credit cards with built-in travel protections contain trip cancellation and interruption coverage, and sometimes may cover financial insolvency or default of a travel provider,” Valdez said, while cautioning that each policy is different.
In any case, we recommend booking Spirit flights (and all flights, actually) with a credit card, and not just to earn points.
If all other refund efforts fail, federal law could be on your side.
The Fair Credit Billing Act gives consumers the right to dispute credit card charges for services paid for but not rendered — so this could be a backup way to recover money paid for a flight that doesn't take off.
What about Free Spirit points?
Technically, airlines control their frequent flyer rewards, and if the airline were to liquidate, the points would likely cease to exist along with the carrier.
However, that wouldn’t preclude a competitor stepping in to try to win customers who had flown with Spirit.
You don't have to be a frequent Spirit flyer to feel the impact of the carrier becoming a smaller player at airports across the country.
“Even if you never fly Spirit, you owe them a debt of gratitude for cheaper fares on the airlines you do fly,” said Scott Keyes, founder and chief flight expert at Going, noting research that shows competitor airlines have historically dropped prices by an average of 19% on routes Spirit launched.
“In a world without Spirit, Delta can get people to pay $300 or more for a flight from New York City to Miami,” Keyes said. “But when Spirit offers the same route for $49, it forces Delta to drop their fares or risk losing customers.”
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
