Spirit Airlines, a US-based low-fare airline, has announced its intention to defer all Q2 2025-2026 Airbus orders until 2030-2031 and furlough around 260 pilots in a bid to boost its liquidity position by US$340 million by 2026.
This announcement comes not long after the proposed merger with JetBlue failed to materialise, leaving the future fate of both carriers hanging precariously in the balance.
At the time, Spirit’s President and Chief Executive Officer, Ted Christie, said he was still confident in Spirit’s future as a successful airline. Now, Christie said that this new agreement with Airbus would give Spirit “the opportunity to reset the business and focus on the core airline while we adjust to changes in the competitive environment.”
There are no changes to the aircraft on order with Airbus that are scheduled to be delivered in 2027-2029.
Spirit Airlines anticipates that 40 of its aircraft will be grounded by December 2024, with an average of 25 aircraft throughout the year due to ongoing issues surrounding the Pratt & Whitney GTF engine.
Spirit has entered into a compensation agreement with Pratt & Whitney over the engines, which will bump its liquidity between $150 million and $200 million. The airline will receive monthly payments from the engine OEM throughout 2024 to compensate for the loss of aircraft.
As a result, due to the increase in aircraft groundings and the deferral of aircraft orders, the furloughing of pilots will come into effect on 1 September 2024.
Christie added, “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.”
Image credit: Spirit Airlines
