Spirit Airlines is taking steps to streamline its operations and sharpen its focus on core services. In a strategic move announced on April 8, 2024, Spirit Airlines detailed plans to defer Airbus deliveries and implement pilot furloughs, aiming to enhance its business model and financial health.
In collaboration with Airbus, Spirit Airlines has revised its delivery schedule for new aircraft. Originally slated for the second quarter of 2025 to the end of 2026, these deliveries will now be postponed to between 2030 and 2031. However, this postponement does not affect the direct-lease aircraft due for delivery in the second and third quarters of 2025. This decision is forecasted to bolster the airline’s liquidity by around $340 million over the upcoming two years, with no modifications to the delivery timeline for 2027-2029 orders.
Ted Christie, the airline’s President and CEO, emphasized the significance of this move. “By deferring these aircraft deliveries, we seize the chance to recalibrate our operation and concentrate on our primary airline services amidst the evolving competitive landscape,” Christie stated. This adjustment is expected to provide Spirit Airlines with the financial resilience necessary to pursue profitability once again.
Adjusting to Operational Realities
Spirit Airlines also announced that, starting September 1, 2024, it would furlough 260 pilots due to grounded aircraft from Pratt & Whitney GTF engine availability issues and the altered delivery schedule. Christie expressed regret over the decision but highlighted its necessity for maintaining the airline’s fiscal health and ensuring long-term viability. Furthermore, Spirit anticipates a significant liquidity boost, receiving compensation between $150 million and $200 million from Pratt & Whitney for the GTF engines. The agreement with Airbus also extends the exercise dates for optional aircraft by two years, without altering the total number of aircraft ordered or the options for additional acquisitions.
The backdrop to these operational shifts includes a recent legal hurdle where a federal judge blocked JetBlue’s $3.8 billion takeover bid for Spirit Airlines in January 2024. Following this, both Spirit Airlines and JetBlue declared on March 4, 2024, that they would not proceed with the merger. Despite this outcome, Christie remains optimistic about Spirit Airlines’ standalone future. “Though the decision was disappointing, our outlook as a thriving independent airline remains bright,” Christie affirmed.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
