Spirit Airlines is at risk of shutting down and liquidating as soon as this week, according to two reports. This could mean the end of the ultra-low-cost carrier.

Bloomberg and CNBC separately reported late Wednesday that the airline expected to run out of cash imminently as a result of surging jet fuel costs. Spirit has struggled to turn a profit since the start of the COVID-19 pandemic in 2020, and it has filed for bankruptcy twice since late 2024, most recently in August.

“We don’t comment on market rumors and speculation,” a spokesperson for Spirit told TPG.

Spirit continued to operate flights and sell tickets on Thursday. However, concerns across the airline industry were growing.

The Florida-based airline had hoped to exit its second bankruptcy by this summer after reaching an agreement with creditors in late February; it was in the process of shrinking its fleet and reconfiguring its network in an effort to find a more viable business model.

Numerous Spirit aircraft have been spotted flying to a storage facility at Southern California Logistics Airport (VCV) in Victorville, California, in recent days, though it was not clear whether the aircraft were being stored because of liquidation plans or as part of Spirit’s planned restructuring.

The recent surge in jet fuel prices following the start of the Iran war has significantly raised costs for all airlines. Fuel is typically the second largest expense for airlines, following labor. And for Spirit, it appears this jump in costs may soon reach a level the airline can’t meet.

If you’re scheduled to fly with Spirit in the near or distant future — or if you find yourself stranded somewhere far away from home now — here’s what you need to know.

You may be able to get your airfare back

Typically, during a bankruptcy and liquidation scenario, consumers are among the last to get their money back. Whatever funds and assets are left typically go to creditors first, then to various other parties, and finally to customers and employees near the bottom of the list.

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Fortunately, passengers with future tickets should be able to get some form of refund, as long as they paid by credit card.

Most major credit cards offer a range of consumer protections and allow holders to dispute charges for goods and services that the vendor fails to deliver.

In this case, that would include airfare if the airline is no longer able to provide the transport you’ve paid for.

Call the number on the back of your credit card, tell the representative that you want to dispute a charge, and then follow the instructions to submit a claim.

“However, there’s no guarantee the refund will be made,” Henry Harteveldt, president and travel industry analyst at Atmosphere Research Group, warned in a past interview.

If you used a debit card to buy the ticket, it’s possible, although less likely, that you’ll be able to file a dispute for undelivered services, according to the U.S. Department of Transportation. You should still call the number on the back of your card to learn about your options.

Keep in mind that these undelivered service claims only apply when it’s the vendor’s fault — if you choose to cancel a trip that isn’t refundable, you can’t initiate a chargeback.

Travel insurance may help — but it might not

Travel insurance, whether a stand-alone policy or the trip interruption/cancellation coverage included with some credit cards, can save the day when the unexpected happens. It can cover expenses like alternate travel arrangements, hotels and even things like new clothes, phone chargers, meals and luggage.

Whether or not it could help you in the event Spirit stopped flying, though, would depend on your specific insurance policy.

Credit cards with travel insurance protections

Unfortunately, the travel insurance policies included with many major credit cards do not appear to apply if the airline you book with goes out of business.

In the benefits guide for the Chase Sapphire Reserve® (see rates and fees) for instance, a list titled “What’s not covered?” includes “Default of the Common Carrier resulting from Financial Insolvency or Financial Insolvency of a Travel Agency, Tour Operator, or Travel Supplier.” The term “common carrier” refers to a company — such as an airline, train service, or ferry operator — that transports people.

Similarly, in the benefits guide that comes with the American Express Platinum Card®, you’ll find, “Financial insolvency of a travel agency, tour operator, or Travel Supplier” is listed below the headline “What is not covered” for its trip cancellation and interruption insurance*.

*The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

What about stand-alone travel insurance?

If you have a stand-alone insurance policy that you purchased separately, this situation might be covered. Check your policy documents, and call the reporting line to start a claim if you’re not sure.

There’s one possible catch, however. Spirit filed for bankruptcy in August, just months after emerging from an earlier bankruptcy. As Chrissy Valdez, senior director of operations at insurance marketplace Squaremouth, previously told TPG, there’s a chance that tickets purchased after the bankruptcy filing won’t be eligible for coverage, since the bankruptcy counts as a “known event,” which is like a preexisting condition.

Booking new flights

Unfortunately, if your flight has been canceled, you’re stuck paying for a new flight out of pocket. Prices are high as summer approaches, so you may need to be more flexible when making new arrangements.

Try using Google Flights, and search across all airlines. Be open to taking a flight with a connection even if you’d prefer a nonstop. Check different dates and airports if you can.

You’re not likely to find any good deals with miles, since airlines price awards dynamically. Still, it’s worth checking award prices if you happen to be sitting on a big stash of points.

Could other airlines offer ‘rescue fares’?

Those with imminent travel or who are in the middle of a trip and find themselves stuck should keep an eye out for “rescue fares.” In previous airline shutdowns, some carriers that cover the same markets have offered discounted fares to help stranded passengers get back home.

TPG will update this section with any potential rescue fares or plans offered by other carriers, though there’s no guarantee that will happen — especially as other carriers grapple with high fuel costs themselves.

Bottom line

A liquidation of Spirit would mark a sad and unfortunate end to the storied ultra-low-cost airline. While plenty of people loved to hate on Spirit, the airline nevertheless opened travel opportunities to a wide swath of people and forced legacy airlines to lower their prices to compete.

If a potential Spirit insolvency leaves you in the lurch, you may have some options to recover your airfare and possibly even expenses.

But even so, with summer travel coming up and spring break currently underway, this is a tough time of year to book last-minute flights. If your travel plans have been affected, it may take some creativity and flexibility to salvage your trip without paying an arm and a leg.