Spirit Airlines filed for bankruptcy. What does that mean for travelers?

NEW YORK (AP) — Spirit Airlines, the largest budget carrier in the U.S., filed for Chapter 11 bankruptcy protection Monday. The airline said customers should not see any disruption to their travel plans while the process unfolds.

The filing followed years of struggles for the Florida-based airline, which is known for its no-frills, low-cost flights. Spirit failed to bounce back from the COVID-19 pandemic, largely due to rising operating expenses and stiffer competition. The airline has lost more than $2.5 billion since the beginning of 2020 while also racking up mounting debt.

The bankruptcy proceedings are aimed at restructuring the company and shoring up its finances. Still, unease around the bankruptcy petition may have some travelers looking elsewhere for flights ahead of the busy holiday travel season.

Here's what you need to know.

For now, it's business as usual. Spirit says it expects to continue operating normally throughout the bankruptcy process, and that travelers can continue making reservations and taking flights without interruptions.

All existing tickets, credits and loyalty points remain valid, as do the airline's affiliated credit cards and other membership perks, the company said.

Reassuring customers that the bankruptcy won't impact their travel plans or loyalty programs will be crucial to Spirit's short-term ability to preserve business, according to Sarah Foss, global head of legal at financial services company Debtwire.

“If you’re someone that’s booking your holiday December travel ... are you going to book Spirit, which is in bankruptcy? Or are you going to choose maybe Southwest or Delta — or something else that you view as potentially being more stable?” Foss said.

As long as Spirit is on track to reach a deal with lenders relatively quickly and avoid wider liquidation, frequent flyer miles and other loyalty program should remain untouched, she said. But the response from customers to the Chapter 11 could threaten the company’s turnaround efforts.

Foss said Spirit estimates show some 34.3 billion frequent flyer miles worth about $105 million are currently unredeemed. “A rush to use these miles or otherwise have its customers choose another airline to travel for the holidays could be disastrous for the airline’s reorganization efforts,” she said.

While Spirit says currently scheduled flights won't be affected, the airline already warned about tightened capacity before Monday's filing and said it would reduce the number of trips it offered in the coming months.

In a highly unusual move, Spirit announced plans to cut its October-through-December schedule by nearly 20%, compared with the same period last year. The airline also has had to ground dozens of its Airbus jets due to required repairs to Pratt & Whitney engines.

A reduced schedule should help prop up Spirit's fares, according to some analysts, but it would give the airline's rivals more of a boost than Spirit itself. Analysts from Deutsche Bank and Raymond James say Frontier, JetBlue and Southwest would benefit the most because of their overlap with Spirit on many routes.

Spirit flies in and out of destinations across the U.S., as well as Latin America and the Caribbean.

The airline's largest hub is Fort Lauderdale-Hollywood International Airport in Florida. Spirit is the biggest airline at the airport, accounting for 30% of all passengers in August, according to Transportation Department figures.

Spirit's second-biggest hub is also in Florida. It's Orlando International Airport, where Spirit follows only Southwest in terms of passenger counts — ranking slightly ahead of Delta, Frontier and American. The airline also has big operations in Las Vegas, Atlanta and Los Angeles. The carrier's largest maintenance facilities are in Detroit and Houston.

Spirit frequently ranks among U.S. airlines with the highest consumer complaint rates, according to the Transportation Department.

Spirit may still be the biggest discount airline in the U.S., but it faces more competition. The company recorded much of its recent losses as more and more rival carriers began offering their own versions of low cost, no-frills tickets.

Some of Spirit's biggest competitors are other budget airlines, like Frontier and JetBlue, both of which previously tried to merge with Spirit. JetBlue and Spirit abandoned their latest deal this year after a federal judge sided with the Justice Department in its lawsuit to block the $3.8 billion deal, arguing it would drive up prices too much for customers who depend on low fares.

Major carriers also offer competitive, tiered pricing today. Southwest's "Wanna Get Away” fares and the Basic Economy options offered by United and Delta, for example, have become popular with budget-conscious travelers.

Koenig reported from Dallas.

FILE - The Spirit Airlines logo is seen at the ticket counter at Manchester Boston Regional Airport, on June 2, 2023, in Manchester, N.H. (AP Photo/Charles Krupa, File)

FILE - A Spirit Airlines 319 Airbus approaches Manchester Boston Regional Airport for a landing, Friday, June 2, 2023, in Manchester, N.H. (AP Photo/Charles Krupa, File)

FILE - Airline passengers self check in at the Spirit airlines counter at Orlando International Airport on July 3, 2024, in Orlando, Fla. (AP Photo/John Raoux, File)

FILE - Passengers wait in a line for help at the Spirit Airlines ticket counter at the Tampa International Airport Thursday, June 1, 2023, in Tampa, Fla. (AP Photo/Chris O'Meara, File)

WASHINGTON (AP) — President Joe Biden is requesting nearly $100 billion in emergency disaster aid after Hurricanes Helene and Milton, and other natural disasters, telling lawmakers that the money is “urgently needed.”

The letter Monday to House Speaker Mike Johnson comes as lawmakers meet during a lame-duck session to finish key priorities before making way for a new Congress and the incoming Trump administration. Biden said he has met firsthand with those harmed by the storms and he heard what residents and businesses needed from the federal government.

"Additional resources are critical to continue to support these communities,” Biden said.

The largest share of the money, about $40 billion, would go to the main disaster relief fund at the Federal Emergency Management Agency. The fund helps with debris removal, repairing public infrastructure and providing financial assistance to survivors.

Biden said the fund would face a shortfall this budget year without additional money. He said that would not only affect the agency's ability to provide lifesaving assistance to survivors, but also would slow recovery efforts from prior disasters.

An additional $24 billion would help farmers that have experienced crop or livestock losses, and $12 billion would go toward helping communities recover through block grants administered by the Department of Housing and Urban Development.

Some $8 billion more would help rebuild and repair highways and bridges in more than 40 states and territories. The administration is also seeking $4 billion for long-term water system upgrades to mitigate future damage from natural disasters.

The Small Business Administration has run out of money for a program that provides low-interest loans for businesses, nonprofits and homeowners trying to rebuild after a disaster. Biden is seeking $2 billion for that program. Several other agencies would also receive emergency funds if Congress agrees to the full request.

Lawmakers were expecting a hefty number from the administration. Johnson, R-La., said Congress will evaluate the request and “we’ll make sure we deliver for the hurricane victims and the people that have suffered from that.”

Johnson had also visited western North Carolina after Hurricane Helene to assess the damage. At the time, he said Congress would act in a bipartisan fashion to help communities recover, but he also said it would be ”the appropriate amount that the federal government should do.”

With many Republicans campaigning on reducing federal spending, there could be some debate about portions of Biden's request. The federal government doesn't help with every disaster. It generally gets involved only if the needs are above the ability of a community or state to handle.

Republicans are also outraged that a FEMA employee directed workers helping hurricane survivors not to go to homes with yard signs supporting Donald Trump's presidential campaign. The agency's leader, Administrator Deanne Criswell, said the employee was fired and the directive was a clear violation of the agency's core values to help people regardless of political affiliation.

The Senate Appropriations Committee is expected to hear Wednesday from the heads of several of the government agencies that would receive funding through Biden's request. It's possible that emergency aid could be attached to any spending bill designed to keep federal agencies operating after current funding expires Dec. 20.

Biden noted that Congress had provided more than $90 billion in aid after Hurricane Katrina nearly two decades ago, and more than $50 billion after Hurricane Sandy in 2013. He urged Congress to take “immediate action.”

“Just as the Congress acted then, it is our sworn duty now to deliver the necessary resources to ensure that everyone in communities reeling from Hurricanes Helene and Milton — and those still recovering from previous disasters — have the Federal resources they need and deserve,” Biden wrote.

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AP Congressional Correspondent Lisa Mascaro contributed to this report.

FILE - With President Joe Biden aboard, Marine One surveys areas affected by Hurricane Milton in Florida, from Tampa to St. Petersburg, Oct. 13, 2024. (AP Photo/Manuel Balce Ceneta, File)

FILE - President Joe Biden speaks following a briefing by federal, state, and local officials in St. Pete Beach, Fla., during a tour of areas affected by Hurricane Milton, Oct. 13, 2024. (AP Photo/Manuel Balce Ceneta, File)

FILE - President Joe Biden, right, shakes hands with Buck Paulk, property manager of Shiloh Pecan Farm, after he spoke at the farm in Ray City, Ga., Oct. 3, 2024, as part of his trip to see areas impacted by Hurricane Helene. Looking on at right is Sen. Raphael Warnock, D-Ga. (AP Photo/Susan Walsh, File)

FILE - President Joe Biden, right, greets people in Keaton Beach, Fla., Oct. 3, 2024, during his tour of areas impacted by Hurricane Helene. (AP Photo/Susan Walsh, File)