If your holiday plans involved flying Spirit Airlines, which declared bankruptcy on Monday, there's no need to panic.

The airline, burdened with $3.1 billion in long-term debt based on regulatory filings, has assured customers it will maintain normal operations during this transitional phase.

“Passengers can continue to book and travel as usual, and all tickets, credits, and loyalty points remain valid,” Spirit announced in a press release.

However, changes could emerge in the coming months. Historically, companies undergoing bankruptcy, including airlines, often implement significant shifts to rebalance finances and regain profitability.

While these adjustments may not have an immediate effect on Spirit's customers, aspects like its frequent flyer program and flight routes could evolve, as noted by Zach Griff, senior reporter at The Points Guy.

“In the near term, I don’t anticipate many disruptions,” Griff shared in an interview with CNN. “For those booking around Thanksgiving or Christmas, I’m not too concerned. However, I’d approach booking trips further in the future with caution, considering the ongoing restructuring and transformation Spirit is facing.”

Spirit also expressed optimism about its ability to exit bankruptcy early next year with a leaner debt profile and enhanced financial stability. The airline has already reduced its flight network, cutting 32 routes in September and an additional 24 in November, signaling early attempts to streamline operations.

It’s worth noting that Spirit is not alone—other major U.S. airlines, including United in 2002, Delta in 2005, and American in 2011, have also weathered bankruptcy filings in the past.

Spirit’s Budget-Friendly Business Model

Spirit Airlines has been characterized by its cost-conscious approach, maintaining rock-bottom base fares but charging separately for extras like carry-ons, checked luggage, and seat assignments. On average, the airline’s roundtrip fare sits at $140, excluding taxes, fees, and additional revenue streams, according to data from aviation analytics company Cirium. This is slightly higher than competitors Frontier ($136) and Allegiant ($134) but considerably cheaper than traditional airlines.

Spirit has also pursued two significant merger attempts in recent years. In February 2022, it explored a deal with Frontier Airlines, only to shift gears in July 2022 when JetBlue Airlines outbid Frontier. However, a federal judge blocked the JetBlue acquisition earlier this year due to antitrust concerns. Despite these setbacks, Spirit remains confident in its ability to emerge from bankruptcy in a better position.

“This series of transactions will substantially strengthen our financial foundation and set us up for long-term success while enabling us to enhance the guest experience with more travel choices, better value, and greater flexibility,” said Spirit CEO Ted Christie in a statement on Monday.

Spirit’s budget model has also prompted legacy airlines to offer basic economy fares to compete on price, a move that benefits travelers. This competitive dynamic, Griff argues, underscores the importance of Spirit’s continued existence.

“Spirit acts as a disruptor, challenging competitors with their lower prices. Without their presence, traditional carriers often feel less compelled to keep fares low, leading to pricier tickets for consumers,” Griff explained.

Meanwhile, travel patterns have shifted post-pandemic, with altered consumer priorities and lingering uncertainties. Sarah Foss, global legal head at the consulting firm Debtwire, highlighted that the stigma of bankruptcy could influence travelers’ willingness to choose Spirit.

“It appears to be a fairly routine bankruptcy, so passengers shouldn’t be overly worried right now,” Foss said. However, she added that some individuals might hesitate to book flights with Spirit or opt to quickly use up their loyalty points amid the uncertainty.

“For anyone in a position to choose between airlines, Spirit’s bankruptcy might tip the scale against them in terms of preference,” Foss concluded.