A Spirit Airlines aircraft undergoes operations in preparation for departure on the Austin-Bergstrom International Airport on February 12, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Spirit Airlines said Monday that it’s going to defer deliveries of latest Airbus planes and furlough about 260 pilots because it tries to spice up liquidity.
“After all, these steps aren’t ones we wish to take but they’re mandatory to make sure a robust and profitable future for Spirit,” CEO Ted Christie said in a note to staff Monday.
Spirit said it’s going to defer all Airbus planes it has on order that were scheduled to be delivered from the second quarter of 2025 through the top of 2026. It can as a substitute take delivery of them in 2030 and 2031. The deferrals don’t include the direct-lease planes — one apiece within the second and third quarter of next yr — nor scheduled deliveries for 2027 through 2029, Spirit said.
The budget airline said the deferrals would boost its liquidity by about $340 million over the subsequent two years.
“Deferring these aircraft gives us the chance to reset the business and give attention to the core airline while we adjust to changes within the competitive environment,” Christie said in a news release.
Miramar, Florida-based Spirit has been on the lookout for ways to spice up liquidity and persuade investors that it’s on the right track to accomplish that because it struggles with the the grounding of a lot of its Airbus planes due to a Pratt & Whitney engine recall. Its planned acquisition by JetBlue Airways fell apart earlier this yr after a federal judge ruled in January that the deal could be anti-competitive.
The airline said March 29 that it’s going to receive monthly payments in compensation for the grounded Pratt & Whitney engines through the top of 2024, which might lift liquidity between $150 million and $200 million.
The pilot furloughs would take effect in September, Spirit said Monday. The airline already had leaves of absence in place for flight attendants and there’s “no plan” for cabin crew furloughs, their union, the Association of Flight Attendants told members Monday. Spirit is closing its Atlantic City, Recent Jersey, crew base and staff will likely be reassigned.
Other airlines have adjusted their hiring and training in recent weeks, citing a scarcity of aircraft — a pointy change from the pilot shortage that worsened when travel demand snapped back after the worst of the pandemic. United Airlines pilots’ union late last month said the corporate is offering unpaid time without work for pilots next month due to late-arriving planes from Boeing.
The Air Line Pilots Association, Spirit pilots’ union, said Monday it’s exploring voluntary measures that would limit the variety of pilot furloughs.
“Coupled with the retirement of our A319 fleet and the continuing Pratt & Whitney GTF engine issue, the airline finds itself with more pilots than its operations require,” Ryan Muller, chairman of the Spirit ALPA chapter, said in an emailed statement. “The ramifications of the Company’s announced decision are deeply troubling for our entire pilot group.”
Spirit said within the filing that it plans to publish its next financial outlook for the quarter and full yr inside the subsequent week. It’s scheduled to report first-quarter results before the market opens on May 6.