Skift Take
These two huge developments suggest that Spirit Airlines management are taking the carrier’s financial situation very seriously.
Spirit Airlines has announced two major shake-ups to shore up its balance sheet.
Firstly, the low-cost carrier has struck a deal with Airbus to delay deliveries of some new planes. Almost all Airbus A320neo Family aircraft that were due to be delivered between Q2 2025 and the end of 2026 are being deferred.
Spirit says the decision is expected to improve its liquidity position by approximately $340 million over the next two years. The deferred planes will now arrive five years later in 2030 and 2031.
The low-cost airline said the move only impacts orders within the 2025-2026 period, with those scheduled after this unaffected.
It added that the deferrals do not include direct-lease planes due for delivery in the period, with one each in Q2 and Q3 of 2025.
The details were contained within an SEC filing published on Monday morning.
Ted Christie, Spirit’s President and CEO said: “Deferring these aircraft gives us the opportunity to reset the business and focus on the core airline while we adjust to changes in the competitive environment. In addition, enhancing our liquidity provides us additional financial stability as we position the company for a return to profitability.”
“We would like to thank our partners at Airbus for their continued support and commitment to the long-term success of Spirit.”
Spirit To Furlough Pilots
Secondly, the airline is making changes to its pilot pool.
Spirit plans to furlough around 260 pilots from September 1. It says this is “a result of grounded aircraft due to Pratt & Whitney GTF engine availability issues, along with the 2025 and 2026 aircraft deferrals.”
In July 2023, Pratt & Whitney discovered that its geared turbofan engines manufactured between the fourth-quarter of 2015 and the third-quarter of 2021 had a contaminated powdered metal that could interfere with the functioning of the engines.
The issues primarily affected Airbus A320neos, causing carriers such as Spirit to ground planes to undergo checks and repairs. The low-cost carrier expects to ground 25 A320neos during 2024 alone.
On the pilot furloughs, Christie said: “I am extremely proud of our dedicated Spirit team for their focus and resilience over the last few years. Unfortunately, we had to make the difficult decision to furlough pilots given the grounded aircraft in our fleet and our deferral of future deliveries.
“We are doing everything we can to protect team members, while balancing our responsibility to return to positive cash-flow and thrive as a healthy company with long-term growth prospects,” added Christie.
This is a breaking story that will be updated.
