Spirit’s Bankruptcy: Our Answers to the 5 Biggest Questions

Spirit Airlines became the first major U.S. airline in 13 years to file for a Chapter 11 bankruptcy after facing mounting debts and declining revenues. 

The bankruptcy filing comes after a federal judge rejected the JetBlue-Spirit merger in January, arguing that a combined airline would ultimately cause airfares to increase. 

Spirit will continue to operate and customers can still book Spirit flights using their credit cards or loyalty points. 

But there are a lot of questions still swirling around Spirit. Here’s what you need to know. 

Spirit was once one of the most profitable carriers in the industry, reporting operating margins as high as 20%. Under the leadership of former CEO Ben Baldanza, who died earlier this month, Spirit adopted its bare bones service and unbundled fares that made it so popular with customers. 

But things changed after the pandemic. 

Spirit and other ultra-low-cost carriers had significantly expanded capacity in the domestic market post-pandemic, bullish that they would experience a travel resurgence.