Spirit Airlines has had some bumps in the road this past year. The Ultra Low Cost Carrier was unsuccessful in attempting a merger with JetBlue Airways following the Justice Department’s Decision to block the merger. In an agreement with Airbus, Spirit Airlines will defer all aircraft with expected deliveries from the second quarter of 2025 through the end of 2026 to 2030-2031. According to Spirit Airlines this move will improve Spirit’s liquidity position by approximately $340 million over the next two years.
Contributing Factors
In addition to the termination of the merger with JetBlue, Spirit has had another issue on their hands. The Pratt & Whitney Geared Turbo Fan (GTF) engines on the Airbus A320neo and A321neo aircraft have been plagued with issues. While not exclusively a Spirit Airlines issue, this resulted in new aircraft being grounded while the engines are being serviced. Spirit entered into a compensation agreement with Pratt & Whitney for the GTF issues. Spirit estimates the compensation to improve liquidity by upwards of $200 million over the term of the agreement.
Furlough Of Pilots
Spirit also announced that approximately 260 pilots will be furloughed beginning September 1,2024. “I am extremely proud of our dedicated Spirit team for their focus and resilience over the last few years. 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. I thank the Spirit team for continuing to deliver affordable fares and great experiences to Guests,” said Ted Christie, Spirit’s President and Chief Executive Officer.