Your Spirit loyalty points are probably worthless now - but these other airlines may match your rewards

By Genna Contino

The collapse of Spirit Airlines is a cautionary tale for travelers who hold on to rewards points for too long

Spirit Airlines flights were canceled after the carrier announced it was shutting down. Many Spirit ticketholders are getting refunds on flights - but this group of customers is out of luck.

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Frequent flyers of Spirit Airlines (FLYYQ) learned this weekend that customer loyalty is not always rewarded - at least not when a company shuts down.

After Spirit announced this weekend that it was officially collapsing, the airline began dishing out refunds to travelers with booked flights - but loyal customers who have amassed thousands of points through flight purchases and credit-card swipes might not see a penny in compensation for their accumulated rewards.

"Spirit is unfortunately not able to refund Guests for flight credits, vouchers, or miles," an FAQ on Spirit's restructuring site says. "Refunds are only able to be applied for canceled flights purchased with a credit or debit card."

Spirit's loyalty points were valued at about 1.1 cents apiece by the Points Guy travel site, but a bankruptcy court will ultimately determine if they're actually worth anything.

Read more: Spirit Airlines made this critical mistake that drove its demise

Spirit customers can file a proof of claim for their points, vouchers or flight credits through Epiq, a website that streamlines bankruptcy proceedings for companies - but they shouldn't count on a payout. Consumers are typically one of the last groups to get their money back in bankruptcy and liquidation scenarios, according to the Points Guy.

Although Spirit's website says customers cannot transfer points to a different airline, JetBlue (JBLU), Southwest Airlines (LUV) and Avelo Airlines are offering loyalty matching programs for Spirit customers.

Free Spirit Silver and Gold members can receive Mosaic 1 and Mosaic 2 status at JetBlue for a limited time, giving them the opportunity to continue earning points and perks at a different airline. JetBlue also announced 11 new flights out of Fort Lauderdale-Hollywood International Airport in Florida, where Spirit previously had a large presence.

Read more: Did JetBlue just admit to surveillance pricing? Airline now says viral post about $230 fare hike was an error.

Southwest Airlines is granting Spirit customers who had Silver and Gold status its own A-list status for 120 days, which allows for a free checked bag, no charge for certain seats and first-group boarding.

At Avelo Airlines, members of the Spirit Savers club, which was available for a $69.95 annual fee, can transfer to Avelo Plus to receive a year of membership. Avelo Plus gives travelers access to discounted fares and free priority boarding.

Spirit's collapse is a cautionary tale for people who hoard company loyalty points, said Katy Nastro, a travel expert at the travel site Going. Not only do the value of these points depreciate over time, as companies tend to change redemption values every few years, but consumers also "don't want to end up in this situation where you were holding on to a ton of loyalty that's basically worthless if the airline goes bust," Nastro said.

Read more: United Airlines' best loyalty perks will soon be reserved for its cardholders. Is the card worth it?

To avoid losing out, travelers should try to earn and use their points at the same rate, said Summer Hull, senior director of content at the Points Guy. It's also a good idea to seek out loyalty programs that have multiple redemption options, such as Chase (JPM) Ultimate Rewards, Bilt Rewards, American Express (AXP) Membership Rewards and Capital One (COF) Venture Miles.

People who have questions about their Spirit credit cards, meanwhile, should contact the card issuer, Bank of America (BAC), according to the airline's website.

"In the future, if you do have airline miles with an airline that has filed bankruptcy, even if they are still operating, I'd certainly recommend prioritizing using those miles as quickly as you earn them," Hull said.

When reached by MarketWatch for comment, an external public-relations agency for Spirit directed a reporter to the airline's Q&A page.

Read next: From private suites to $20,000 seats: Luxury travelers have more ways to splurge while many passengers can't afford economy

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-Genna Contino

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05-05-26 1009ET