by Lacey Pfalz
Last updated: 9:55 AM ET, Mon April 8, 2024
Spirit Airlines and Airbus have agreed to defer all its aircraft expected to be delivered in 2025 and 2026 to 2030-2031 as the airline seeks to improve its financial position following its failed merger with JetBlue.
The agreement with Airbus will improve Spirit’s liquidity position by $340 million in 2025 and 2026. The deferred aircraft don’t include two direct-lease aircraft scheduled for delivery in the second and third quarters of 2025, and the ones on order for delivery in 2027-2029.
Additionally, Spirit will furlough around 260 pilots beginning September 1, 2024, in response to grounded aircraft from engine availability issues and the new aircraft delivery deferrals.
"I am extremely proud of our dedicated Spirit team for their focus and resilience over the last few years,” said Spirit’s President and CEO, Ted Christie. “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."
Spirit has been struggling financially following the government’s interference in a possible merger between Spirit and JetBlue. When the government won the lawsuit claiming antitrust concerns, the merger ended.
The airline saw a new low in financial matters in March, following the merger’s dissolution. During the first week of March, stock prices fell to a record low, with analysts predicting bankruptcy.
Yet the airline also announced nine new routes later that month, including new routes between Portland and Chicago and between Salt Lake City and Fort Lauderdale, as it seeks to expand its service to heavily traveled areas.
"This amendment to our agreement with Airbus is an important part of Spirit's comprehensive plan to bolster profitability and strengthen our balance sheet," said Christie. "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…”
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