Spirit Airlines said it has reimbursed most customers with flight tickets after the budget carrier ceased operations.
The airline is still processing a “small percentage” of customer refunds, Spirit told CBS News.
Spirit announced early Saturday that it had “started an orderly wind-down of operations” after efforts to obtain a $500 million federal bailout failed. The airline pledged to automatically process refunds for any flight purchased with a credit or debit card.
Who is eligible for a refund?
Under federal law, consumers are entitled to refunds when a business fails to deliver a purchased service, Eric Rosen, director of travel content at The Points Guy, explained. By contrast, he said Spirit customers who paid cash for a ticket or used airline loyalty points are not eligible for a refund, noting that such points can’t be transferred to another airline’s rewards program.
Spirit said Saturday that compensation for passengers who booked flights with a voucher, credit or Spirit points “will be determined at a later date through the bankruptcy process.”
Can other airlines help?
Some other airlines stepped up to help Spirit passengers whose flights were canceled. United Airlines, which offered so-called rescue fares to stranded Spirit passengers, said it rebooked some 14,000 Spirit customers on its own flights. The company is also offering special fares to Spirit customers through May 16.
American Airlines, Delta Air Lines, Frontier Airlines and Southwest Airlines also announced limited-time discounted fares for stranded Spirit customers.
Spirit’s exit from the market leaves room for airlines to replace service on some routes and grab market share. On Monday, just two days after Spirit’s official demise, JetBlue added 11 new routes from Fort Lauderdale and announced a “status match” for Spirit Frequent Flyers.
For a limited time, JetBlue is granting Spirit Airlines loyalty members equivalent status at JetBlue.
Data from YouGov, a market research and analytics firm, suggests that legacy carriers such as American and United are best positioned to get business from Spirit fliers. Roughly 27% of Spirit customers also flew with United over the past year, while 25% also booked flights on American Airlines.
Could Spirit’s collapse raise ticket prices?
James Ferrara, CEO of travel advisory company InteleTravel, told CBS News that Spirit’s collapse will send “shockwaves” through the airline industry, affecting many travelers — not just former Spirit customers. That’s because competition from budget airlines helps keep fares in check for all travelers.
“Their presence has historically forced legacy airlines such as American Airlines and United Airlines to remain competitive on pricing, particularly on high-traffic leisure routes,” he said. “Without that pressure, we could see upward pricing trends accelerate, especially in markets where low-cost competition disappears.”
A rise in airfares could price some travelers out of the market, Ferrara said.
“When an ultra-low-cost carrier like Spirit Airlines suddenly halts operations, it doesn’t just strand passengers physically. It creates a ripple effect across pricing, availability and consumer confidence,” he said. “Travelers who relied on Spirit for affordable fares are now forced into a much tighter marketplace, often at significantly higher last-minute prices.”
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