Spirit Airlines has reached an agreement with Airbus to defer all new aircraft deliveries that were scheduled to be delivered from the second quarter of 2025 to the end of 2025 to 2030-2031.
On Monday (April 8, 2024), Spirit Airlines announced that they have reached an agreement with Airbus to defer all new aircraft that were scheduled to be delivered from Q2 2025 through the end of 2026 to 2030-2031. The deferrals do not include aircraft that will be directly leased in that period, which includes one each in the second and third quarter of 2025. With the new deferral agreement, Spirit expects to improve their liquidity position by approximately $340 million over the next two years. Previously ordered aircraft scheduled for delivery between 2027 and 2029 are not impacted by the deferral agreement. As a result of these deferrals, as well as grounded aircraft due to Pratt & Whitney GTF engine availability issues, Spirit will furlough approximately 260 pilots effective September 1st, 2024.
In Monday’s announcement, Spirit Airlines’ President and CEO, Ted Christie, said,
“This amendment to our agreement with Airbus is an important part of Spirit's comprehensive plan to bolster profitability and strengthen our balance sheet. 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. In addition, enhancing our liquidity provides us additional financial stability as we position the Company for a return to profitability. We would like to thank our partners at Airbus for their continued support and commitment to the long-term success of Spirit.
“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.”
As previously announced, Spirit entered a compensation agreement with Pratt & Whitney regarding GTF engines, which is expected to improve the carrier’s liquidity by between $150-$200 million over the term of the agreement.
Miramar, Florida-based low-cost carrier Spirit Airlines (NYSE: SAVE) is committed to offering the best value in the sky with service to nearly 100 destinations in the U.S., Latin America, and the Caribbean. The airline allows customers to select and pay for only the products and services they want, something they call “À La Smarte.” Spirit also operates one of the youngest and most fuel-efficient fleets in the U.S. The carrier proudly calls their youthful fleet of aircraft their “Fit Fleet®.” Spirit Airlines operates a fleet of 205 Airbus A320 Family and A320neo Family aircraft.
In Trading Monday morning (April 8, 2024), shares in Spirit Airlines, Inc. (NASDAQ: SAVE) were up 4.85 percent to $4.64/share (9:51 AM EDT).
Source: Spirit Airlines/PRNewswire