Spirit Airlines announced Thursday that it will implement significant layoffs, scale back operations, and sell 23 Airbus jets as part of efforts to cut costs and return to profitability.
The airline, which has struggled following the failed merger with JetBlue earlier this year, aims to reduce expenses by $80 million starting in 2024, Market Watch reported.
The layoffs are expected to align with reduced flight capacity, reflecting the airline’s scaled-back operations. Spirit has faced mounting financial challenges, including competition from larger carriers offering discounted fares and issues with Pratt & Whitney engines, contributing to ongoing losses.
Despite the cutbacks, Spirit’s stock saw a 10.3% after-hours increase following the announcement. The airline stated that it is actively renegotiating terms with debt holders, working toward better financial stability while exploring premium travel offerings to diversify its services.
As part of its restructuring, Spirit entered a deal with GA Telesis to sell 23 Airbus A320ceo and A321ceo aircraft, raising approximately $519 million. The sale is expected to improve liquidity by $225 million by the end of 2025. Spirit also confirmed the retirement of its remaining A319ceo planes and plans to reduce fleet capacity by 20% in the fourth quarter, with further declines expected next year.
Additionally, there are reports that Frontier Airlines is considering a bid to acquire Spirit, while bankruptcy discussions remain on the table. Spirit emphasized that it expects to end 2024 with over $1 billion in liquidity, assuming successful execution of these initiatives.
Spirit Airlines shares have fallen by 85.2% this year amid financial turbulence, operational challenges, and intensified industry competition.
This article was written with assistance from artificial intelligence.