Spirit Airlines Adjusts Fleet Plans and Initiates Pilot Furloughs Amid Financial Challenges
Spirit Airlines announced on April 8 that it has entered into an agreement with Airbus to postpone the delivery of all aircraft originally scheduled for the second quarter of 2025 through 2026. This strategic move aims to conserve cash as the U.S. carrier navigates financial challenges, resulting in the planned furlough of approximately 260 pilots.
The budget-friendly airline intends to reschedule these deliveries for the years 2030 to 2031. This decision comes in tandem with ongoing quality concerns related to Pratt & Whitney’s Geared Turbofan (GTF) engines, which have led to the grounding of several of Spirit’s A320neo aircraft. The engine issues, coupled with rising operational costs and persistent supply chain disruptions, have put additional financial pressure on Spirit.
Following a recent fallout of a $3.8 billion merger deal with JetBlue Airways, Spirit has entered into a compensation agreement with Pratt & Whitney, anticipated to enhance the airline’s liquidity by $150 million to $200 million.
Despite experiencing strong travel demand, Spirit has faced consecutive quarters of financial losses.
Initially, Spirit Airlines had planned to accept delivery of six A320-200neo and fifteen A321-200neo aircraft in 2025. However, following the agreement with Airbus, the carrier will not receive any A320neo aircraft next year. Instead, it will proceed with adding four A321neo from Airbus in the first quarter, along with two leased aircraft in the second and third quarters of 2025, totaling six units for the year.
Moreover, Spirit Airlines confirmed its intention to retire all remaining A319-100 aircraft by mid-2025, with thirteen units exiting by the end of 2024 and the remaining two by the second quarter of 2025. This fleet adjustment aligns with the airline’s strategy to streamline its operations and optimize its fleet composition for improved efficiency and cost-effectiveness.
As part of its revised fleet plan, Spirit aims to conclude 2024 with 215 aircraft and maintain a fleet size of 219 aircraft for both 2025 and 2026. This represents a departure from the previous target of 234 aircraft by 2025.
The deferment agreement with Airbus is projected to bolster Spirit’s liquidity by approximately $340 million over the forthcoming two years. Spirit emphasized that there are no alterations to its future aircraft orders with Airbus slated for delivery during 2027-2029.
Spirit’s CEO, Ted Christie, emphasized the deferral as a pivotal opportunity for the airline to recalibrate its operations and adapt to the evolving competitive landscape. He stated, “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.”
The airline is committed to safeguarding its workforce amidst these changes, striving to achieve a balance between protecting its team and returning to a positive cash flow trajectory.
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Sources: AirGuide Business airguide.info, bing.com, reuters.com