The Spirit Airlines shutdown is sending ripples through the airline industry, likely driving up ticket prices as the budget carrier leaves the market, experts say.
“Any time you reduce capacity while demand stays strong, airfares have nowhere to go but up. And that doesn’t include the increases already happening due to higher fuel costs,” CBS News travel editor Peter Greenberg told CBS News.
Spirit announced early Saturday that it had begun an orderly wind-down of operations effective immediately, after efforts to secure a $500 million federal bailout fell through. All Spirit flights were canceled.
Losing Spirit, famous for its ultra-low fares, will probably mean more expensive tickets on other carriers. A CBS News analysis of Cirium data showed average fares rose 23%, or about $60 for a round-trip, when Spirit stopped serving a route. Passenger volume also dropped 20% in those markets.
Spirit’s exit could add more pressure on fares at a time when prices are already climbing because of elevated jet fuel costs.
What if I have a ticket for a future Spirit flight?
Customers with tickets for upcoming Spirit flights are entitled to full refunds if the airline ceases operations. Spirit said it would automatically process refunds for purchases made with credit or debit cards.
The airline set up a website to handle shutdown-related questions.
“If you’re holding a Spirit ticket for a flight that hasn’t happened yet, you’ll get that back from your credit card company under federal credit laws,” Greenberg said.
Travelers might still face hurdles getting refunds. “Watch what happens closely, and if the airline stops operating, call the credit card you used and dispute the charge,” Eric Rosen from The Points Guy advised. “It’s a non-delivery of service, which qualifies for a dispute.”
Those who paid with cash or used Spirit points may have fewer options, as points can’t transfer to other programs. Compensation for vouchers, credits, or points will be handled later through the bankruptcy process.
Experts recommend keeping your ticket and filing a chargeback rather than canceling now, to maintain protections.
Other airlines stepping in?
The sudden closure means some travelers will need to switch to other carriers. United Airlines said it’s preparing to help Spirit customers and employees, with more details coming soon. American Airlines also announced measures to assist, including fare caps on main cabin tickets for overlapping nonstop routes.
JetBlue and Frontier posted statements offering support for affected travelers. Industry analyst Henry Harteveldt suggested keeping copies of Spirit itineraries, as other airlines may require them for rescue fares.
“These rescue fares may be less expensive than regular prices but probably higher than what Spirit offered,” Harteveldt added.
More pressure on fares overall
Harteveldt noted that the impact on airfares depends on how quickly other airlines add capacity, though summer plans are already set. Over the next three to six months, low-cost carriers like Frontier, Avelo, Breeze, and Allegiant may step into former Spirit markets.
Spirit played a key role in keeping fares competitive. Its departure is expected to contribute to higher prices, on top of existing fuel cost increases.