LanguagesUS low-cost carrier Spirit Airlines has announced it will defer new Airbus deliveries and place 260 pilots on furlough as it looks to “reset the business and focus on the core airline”.
Spirit Airlines confirmed on April 8, 2024, that an agreement with Airbus meant that all aircraft scheduled to be delivered in the second quarter of 2025 through the end of 2026 will instead arrive between 2030 and 2031.
“These deferrals do not include the direct-lease aircraft scheduled for delivery in that period, one each in the second and third quarter 2025, respectively,” a spokesperson for Spirit Airlines said.
Spirit Airlines predicts that the deferment of Airbus deliveries will improve the company’s liquidity position by approximately $340 million over the next two years.
There are no changes to the aircraft on order with Airbus that are scheduled to be delivered in 2027-2029.
“This amendment to our agreement with Airbus is an important part of Spirit’s comprehensive plan to bolster profitability and strengthen our balance sheet,” 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.”
Our 10th A321neo is giving 🔟s across the board!
A321’s are the largest planes in the @Airbus A320 Family and with the new NEO engine option, we can fly further and quieter while reducing our emissions. Guests can also ride in style thanks to our latest cabin upgrade with… pic.twitter.com/N5R41WTRl5
— Spirit Airlines (@SpiritAirlines) February 23, 2024
The carrier also announced that 260 of its pilots will be placed on furlough from September 1, 2024, citing the grounded aircraft due to Pratt & Whitney GTF engine availability issues and the 2025/2026 delivery deferrals as the catalyst for the decision.
“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,” Christie added.
It is estimated that Spirit Airlines’ liquidity will be significantly boosted with between $150 million and $200 million compensation payment from Pratt & Whitney regarding its GTF engines.
The agreement with Airbus also defers by two years the exercise dates for optional aircraft included in Spirit’s purchase agreement.
There is no change to the total number of aircraft on order or Spirit Airlines’ options for additional aircraft.
Spirit Airlines was recently rocked after a federal judge blocked JetBlue’s $3.8 billion takeover of airline in January 2024.
After Spirit Airlines and JetBlue announced on March 4, 2024, they will no longer pursue the merger Christie said he was “disappointed” however, remained “confident in our future as a successful independent airline”.
