Monday, Nov. 25, 2024 | 2 a.m.
Spirit Airlines, the second-most active carrier at Harry Reid International Airport, filed for bankruptcy last week. However, that doesn’t mean the company will stop service anytime soon.
Many of Las Vegas’ other most popular airlines have gone through bankruptcy since 2003, sometimes laying off workers, restructuring debt and changing routes to reach the profitability they now have.
Spirit is set to embark on the same process.
In 2024, it’s “the nature of the business,” said Dan Bubb, a professor in residence at UNLV and expert on aviation in the American West. However, tourists and locals alike shouldn’t count on massive cuts to Spirit’s Las Vegas routes, Bubb said.
“We try to attract as many people as we can, and airlines like that because flights are, generally, pretty much full,” he said. “Las Vegas typically gets spared just because it’s such a popular destination for so many people.”
Delta was in Chapter 11 bankruptcy for two years from 2005 to 2007. Now it’s the most profitable airline in America, raking in over $4.6 billion last year. Allegiant Airlines was originally based out of Fresno, Calif., before it moved to Las Vegas while restructuring from a 2000 bankruptcy. A quarter of a century later, it’s winning awards for customer satisfaction.
From January to September, over 43.5 million people arrived or departed from the Las Vegas airport, a slight increase from an already-record-breaking 2023. Spirit makes up around an eighth of the airport’s traffic.
Spirit earlier this year cut routes from Las Vegas to Charleston, S.C.; St. Louis; Louisville, Ky.; and Minneapolis-St. Paul, according to Travel + Leisure magazine. A Harry Reid airport official told the Sun that it is not currently “seeing impacts to Spirit flights,” but that the airport advises guests to check the airline’s website for updates.
Spirit Airlines wrote in a news release that customers can fly and use loyalty points without any changes. Staff wages and benefits as well as Spirit’s debt payments will continue as normal, according to the company.
The airline has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.
Under its restructuring plan, which the company said received a supermajority of support from investors, Spirit expects to exit bankruptcy in early 2025.
“This set of transactions will materially strengthen our balance sheet and position Spirit for the future,” Spirit CEO Ted Christie wrote.
Spirit was already set to cut costs by $80 million starting next year, largely through a “reduction in workforce,” The Associated Press reported in October. The company also announced the sale of 23 airplanes, around 10% of its 2023 fleet, for over half a billion dollars.
Bubb said the price of fuel for older planes, along with labor costs, are top of mind for airlines going through bankruptcy. He highlighted Boeing’s Dreamliner, an “ultra-modern” 787 that uses 30% less fuel than its predecessor, according to Germany’s Lufthansa.
Airlines are “starting to get rid of their older jets, that are really gas guzzlers, and they’re going to more of these newer ones with more efficient engines,” Bubb said. “They save money there.”
Spirit is set to receive newer planes manufactured from 2014 to 2019 through February, the AP reported.
In the past, airlines’ restructuring process has lost customers pushed out by new routes, price hikes and changes in rewards programs, Bubb said.
For “the holiday season, I don’t think we’re going to see any problems at all,” he said. But if the bankruptcy continues into “spring break or summer of next year, you might see some more serious effects there.”
U.S. airline bankruptcies were common in the 1990s and 2000s, as airlines struggled with fierce competition, high labor costs and sudden spikes in the price of jet fuel. PanAm, TWA, Northwest, Continental, United and Delta were swept up. Some liquidated, while others used favorable laws to renegotiate debts, such as aircraft leases, and kept flying.
The last bankruptcy by a major U.S. carrier ended when American Airlines emerged from Chapter 11 protection and simultaneously merged with US Airways in December 2013.
The Associated Press contributed to this story