Spirit Airlines (NK, Fort Lauderdale International) plans to furlough about 330 pilots on January 31, 2025, a spokesman confirmed to ch-aviation, after the company announced workforce reductions starting early next year as it looks to cut USD80 million in annual costs as part of an ongoing strategy to return to profitability.
"We are implementing a series of cost savings initiatives throughout our business, including a reduction in workforce, as part of our comprehensive plan to return to profitability. We have made the difficult decision to furlough approximately 330 pilots, effective January 31, 2025, to align with our expected flight volume. These decisions are never made lightly, and we are committed to treating all affected team members with the utmost care and respect during this process," the spokesman informed ch-aviation. The ultra-low-cost carrier already placed 186 pilots on furlough last month. On January 31, it will also downgrade 120 captains to first officers
In an SEC filing on October 24, the airline said the workforce reductions are commensurate with expected reduced flight volumes after it agreed to sell 23 of its A320ceo/A321ceo to GA Telesis in a deal expected to generate about USD519 million. The company estimates the net proceeds of the sale, combined with discharging the aircraft-related debt from its balance sheet, will benefit its liquidity by USD225 million through year-end 2025. The aircraft will leave Spirit's fleet by February 2025. The airline's fleet currently includes sixty-four A320-200s and thirty A321-200s, according to ch-aviation fleets data.
For the full year 2025, capacity is projected to decline in the mid-teens, influenced by aircraft sales, engine availability issues, and fleet changes, including the retirement of A319-100s and the addition of six A321neo. Detailed quarter three results are set to be released in mid-November.
Earlier this month, the Wall Street Journal reported that Spirit's board was contemplating a Chapter 11 filing. However, the budget carrier recently gained short-term financial relief when the US Bank National Association granted a two-month payment extension for its 2025 notes.
The company said it remains in discussions with holders of its senior secured notes due 2025 and convertible senior notes due 2026 regarding their maturities. It expects to conclude 2024 with more than USD1 billion in liquidity, which includes unrestricted cash, cash equivalents, and short-term investment securities, contingent on the successful completion of ongoing liquidity initiatives.
Spirit has been grappling with an uncertain future following the collapse of its planned USD3.8 billion merger with JetBlue Airways (B6, New York JFK). In January, a federal judge sided with the Department of Justice (DOJ) to block the merger, citing concerns over reduced competition and harm to consumers relying on Spirit's low fares. As a result, the airlines abandoned the deal. Still, former bidder Frontier Airlines (F9, Denver International) is reportedly exploring a renewed bid for Spirit, although discussions are still in the early stages.
