Spirit Airlines is having financial
difficulties.
The low-budget carrier is not only planning
to sell some planes and make some job cuts, it is reportedly in merger
discussions with Frontier Airlines.
A previous attempt by Spirit to merge with
JetBlue Airways was scuttled by the Department of Justice. But observers will
recall that Frontier was the original suitor. Now the two airlines are
apparently having discussions
about merging again.
The DOJ and the Department of
Transportation might have softened their stance on monopolies after approving
the merger between Hawaiian Airlines and Alaska Airlines.
But first things first. Spirit must
address its financial woes. Some financial analysts even predicted that the
company might go bankrupt. The situation appears dire. In a filing with the Securities
and Exchange Commission (SEC), the airline said it has identified $8 million in
cost-cutting measures on annual cost. That would primarily come through job
cuts or "a reduction in workforce commensurate with the company’s expected
flight volume," Spirit said in the filing. It did not reveal how many
employees would be relieved of their positions.
The airline also said in the filing that
it would sell 23 aircraft for a toll of more than $500 million.
Spirit said its third-quarter 2024
capacity was down 1.2 percent year over year, and the company estimates its
fourth-quarter 2024 capacity will be down roughly 20 percent compared to last
year.
It is not known how far along any
potential merger talks are.
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