Spirit CEO says airline will slash flights, could cut jobs

Spirit Airlines CEO Dave Davis on Wednesday braced staff for more job cuts and said the carrier plans to slash its schedule in November to scale back costs weeks after declaring its second bankruptcy in lower than a yr.

The airline is planning its November schedule and Davis told employees in a memo, which was reviewed by CNBC, that they are going to see a 25% cut in capability over 2024 “as we optimize our network to concentrate on our strongest markets.”

The carrier’s capability was down an identical degree from when it got here out of bankruptcy in March through the top of June, and the brand new cuts point to how the airline is occupied with its near-term schedule because it seeks to scale back costs. The struggling discount airline is in negotiations with vendors and aircraft lessors, and is evaluating its fleet size, because it tries to shrink itself to search out more stable footing, Davis said.

“These evaluations will inevitably affect the scale of our teams as we turn into a more efficient airline,” Davis wrote in his note to employees. “Unfortunately, these are the tough calls we must make to emerge stronger. We all know this adds uncertainty, and we’re committed to keeping you as these decisions are made.”

When asked how lots of its employees can be affected, Spirit told CNBC in an email: “We have now engaged our labor unions to debate the impacts of the network and fleet adjustments on our Team Members, and we are going to share more as these discussions progress.”

Spirit is in search of to chop $100 million a yr from its pilot group and called a gathering with their union, the Air Line Pilots Association, on Wednesday, saying “we can be found to proceed to barter on daily basis thereafter to achieve a consensual agreement” by Oct. 1, in keeping with a separate memo, also reviewed by CNBC, from Spirit COO John Bendoraitis.

ALPA warned pilots a day later: “Even at this early stage, one fact is inescapable: our contract is not going to remain untouched.” If a consensual deal is not reached by Oct. 1, the corporate said it would seek relief from contractual obligations, under the airline’s bankruptcy protection, in keeping with the union.

The airline has already announced furloughs and demotions of a whole lot of pilots. Some flights attendants have already taken voluntary unpaid leaves of absence.

“Although management has not yet indicated they are going to seek to make changes to our [collective bargaining agreement], our bankruptcy attorneys working alongside our AFA legal department are prepared for any next steps management may take,” the Association of Flight Attendants-CWA, the union representing Spirit’s flight attendants, told staff on Wednesday.

Spirit, known for its vibrant yellow planes, low fares and myriad fees, had been successful but high costs, shifting travel preferences and increased competition from larger rivals threw the airline off beam. A failed acquisition by JetBlue Airways left the carrier by itself.

When Spirit emerged from bankruptcy in March, its leaders were hoping to search out more stable financial footing. However the carrier avoided big changes in the method and as an alternative focused on a cope with its bondholders, which exchanged almost $800 million in debt for equity, and it was greeted after bankruptcy with persistently higher costs and weaker-than-expected domestic travel demand.

It reported that it lost nearly $257 million since March 13, after it exited Chapter 11, through the top of June.

Earlier this month, Spirit announced flight cuts to 11 destinations and said it would not start a twelfth as planned, while competitors like United Airlines, Frontier Airlines and JetBlue Airways have unveiled plans for brand new flights to attempt to win over Spirit customers.