What will a Spirit Airlines shutdown mean for travelers?

THE Spirit Airlines Discontinuation That will spill over into commercial aviation, likely increasing fares as the low-cost carrier exits the market, industry experts said.

“Every time capacity is reduced and demand increases, airfares have no choice but to increase. And that’s not counting the fares that are already going up due to soaring fuel prices,” Peter Greenberg, CBS News travel editor, told CBS News Boston.

Spirit announced Saturday morning that it had “begun an orderly cessation of its operations, effective immediately,” after efforts to secure a $500 million federal bailout failed. All Spirit flights had been canceled.

Losing Spirit, known for its ultra-low fares, will likely result in more expensive tickets on other airlines. A CBS News analysis of data from Cirium, an aviation analytics provider, found that average fares jumped 23 percent, or about $60, for a roundtrip flight when Spirit left a route. Overall passenger volume also fell 20% after the carrier left a market.

Spirit’s failure could increase fares at a time when ticket prices are already high due to rising jet fuel costs. Iranian War.

What happens if I have a ticket for a future Spirit flight?

Customers with tickets for future Spirit flights are entitled to a full refund if the airline goes bankrupt.

Spirit said Saturday it will automatically process refunds for any flights purchased from the airline with a credit or debit card. The airline has set up a website to answer questions about its closure.

“If you hold a Spirit ticket for a flight that has not yet taken place, you will get it back from your credit card company under federal credit laws,” Greenberg said.

However, travelers may encounter obstacles in obtaining their reimbursement.

“Monitor very closely what’s happening and if the airline goes out of business, call the credit card you used to purchase the ticket and dispute the charge,” Eric Rosen, director of travel content at The Points Guy, told CBS News. “This results in non-delivery of the service, which constitutes grounds for contesting a fee.”

Spirit customers who paid cash or used one airline’s loyalty points might be out of luck, Rosen said, noting that those points can’t be transferred to other airlines’ loyalty programs.

In Saturday’s announcement, Spirit said “compensation for customers who booked flights” using a voucher, credit or free Spirit points “will be determined at a later date as part of the bankruptcy process.”

However, Julian Kheel, founder of Points Path, advises against canceling a ticket for an upcoming Spirit flight.

“Canceling your ticket now without a promise of a refund will eliminate all protections. Instead, keep your ticket and file a chargeback with your bank,” he said.

Other airlines to the rescue?

An abrupt closure would mean some travelers may have to turn to other airlines for a flight home. United Airlines said Friday it was “preparing to support Spirit customers and employees” and would provide more details soon. American Airlines also announced what steps it would take to help stranded passengers if Spirit discontinues its service.

“The American Airlines team is ready to do everything we can to support Spirit Airlines customers and team members,” she said in a statement to CBS News. “To help customers whose travel may be disrupted, we have immediately implemented fare caps on Main Cabin tickets for Spirit itineraries where we also offer non-stop service and will continue to support as many customers as possible.”

Such price caps would limit American’s prices but could still force Spirit customers to pay more than expected.

“They said they would offer relief fares to Spirit passengers, but it’s not clear whether they will be offered on every route Spirit flies,” industry analyst Henry Harteveldt, founder of Atmosphere Research Group, told CBS News.

JetBlue and Frontier also released statements saying they were prepared to help affected travelers.

Harteveldt urged customers to keep copies of their Spirit itineraries in case another airline needs them.

“These rescue fares could be cheaper than the normal fares these airlines would charge, but would likely be more expensive than Spirit fares,” Harteveldt added.

More pressure on prices

Harteveldt said Spirit’s collapse would affect airfares depending on how quickly other airlines fill those routes, but expanding operations could prove difficult ahead of the busy summer season.

“Airline plans have already been confirmed for the summer. But over time, three to six months from now, I wouldn’t be surprised to see Froniter, Avelo, Breeze and Allegiant taking steps to enter the markets that Spirit serves,” Harteveldt said, citing some of Spirit’s low-cost competitors. “I expect many low-cost airlines will try to replace Spirit in one way or another.”

Kheel said Spirit helped control airfares, even though it wasn’t the most popular with consumers.

“With them disappearing soon, I think we’re probably going to see an increase,” he said. “This is on top of the airfare increases we are already seeing due to rising jet fuel prices. This will only make the situation worse.”