Spirit Airlines, which has been operating under Chapter 11 bankruptcy protection since last year, is still flying as management and creditors negotiate terms of a reorganization plan that would see the Dania Beach-based carrier emerge from court proceedings this summer.
But national reports of a possible liquidation and shutdown arose this week as war-driven fuel prices have risen substantially amid the U.S.-Israel war with Iran, placing increased pressure on the airline’s finances.
Spirit, however, has not confirmed or denied that a liquidation is in the offing and declined to comment on the reports.
Here are a few general options for travelers holding tickets with a grounded air carrier as articulated by the U.S. Department of Transportation:
Q: What if my airline or ticket agent has gone out of business or the airline has stopped flying? Does bankruptcy mean I can’t get my money back?
A: Even though your airline or ticket agent has filed for bankruptcy and even if the airline has ceased flying, you may be able to obtain a refund through the credit card company you used to purchase the ticket or from your travel insurance company. As another option, you may consider filing a proof of claim in the bankruptcy proceeding to recover a partial refund.
Note: If you choose to file a proof of claim in the bankruptcy proceeding, your claim will be considered along with many other creditors that the airline or ticket agent owes money to, such as banks, suppliers, and other service providers, some of which could be considered higher-priority debtors. Once the priority debts are paid, the remaining money will be paid to general unsecured creditors, such as passengers seeking refunds, and each creditor may receive only a small fraction of what is owed.
Spirit Airlines continued operations Thursday amid national reports that it could be liquidated in bankruptcy court within days. The airline declined to address the reports as management was said to be in discussions with key creditors over its proposed reorganization plan. (Joe Cavaretta/South Florida Sun Sentinel)
Q: How do I get my money back working with my credit card company, debit card company, and travel insurance? I used a credit card to purchase my ticket. What should I do if the airline or ticket agent does not provide a refund?
A: If you used a credit card to purchase your ticket and are entitled to a refund, you should file a claim with your credit card company as soon as possible.
Write to your credit card company at the address listed on your monthly statement for disputing a charge (this might not be the address where you send your payment) and include the following:
Your account number.
A photocopy of the ticket, itinerary, or receipt.
If the transportation was partially used, identify the used and unused segments; and state that your airline is in bankruptcy and ceased all operations, you did not receive the service that you charged to your card, and you are requesting a credit pursuant to the Fair Credit Billing Act.
Generally, the credit card issuer must receive this notice no later than 60 days after the date that you received the first monthly statement that listed the charge for the transportation, although credit card companies sometimes waive this deadline for future transportation.
Q: What if I am stranded away from home because my airline has stopped flying?
A: Airline bankruptcies are especially difficult for travelers who are already far from home. Check with other airlines that operate to your destination to see if they will accept your ticket, on a confirmed or standby basis, or will offer you a discount on a new ticket by waiving advance purchase requirements or other restrictions.
If you purchased travel insurance, you may want to reach out to your travel insurance company before you make alternative travel arrangements.