Miami-based ultra low-cost carrier Spirit Airlines is looking to save some cash. The airline has reached an agreement with Airbus to delay all aircraft deliveries and will be furloughing 260 pilots starting from 1 September. The company has been losing money for several quarters on end and an issue with Pratt & Whitney Geared Turbofan engines has made matters even worse.
At the moment, Spirit Airlines functions on a 100% Airbus-fleet. The aircraft delivery-delays, planned for all orders scheduled from the second quarter of 2025 through 2026, which will be deferred to 2030 and 2031, will therefore have quite an impact on the functioning of the airline.
The planned pilot furloughs are a direct consequence of the deferrals and some quality issues with engines made by supplier Pratt & Whitney, forcing some of the A320neo aircraft to stay grounded. Ryan Muller, chair of Spirit’s Master Executive Council at the Air Line Pilots Association, has already said the furloughs “are deeply troubling for our entire pilot group”. Together with a negotiating committee, the council is looking at voluntary measures to soften the impact.
The agreement with Airbus seems to be beneficial for both companies. On one hand, it will improve Spirit Airlines’ liquidity by around 340 million dollars over the next two years, which is needed after a merger with JetBlue fell through. On the other hand, it will allow Airbus to sell planes to other airlines sooner, giving them a great advantage over competitor Boeing, who has been struggling to meet deliveries post-pandemic and has been having a disatruous year so far.
“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”, said Ted Christie, Spirit’s President and Chief Executive Officer in a company statement. “In addition, enhancing our liquidity provides us additional financial stability as we position the company for a return to profitability.”
However, the airline’s decision to postpone deliveries will impact its growth capacity. By 2025, Spirit Airlines will now have 219 planes in its fleet compared to 234 according to the initial plan for expansion. Orders with Airbus for deliveries between 2027 and 2029 are maintained at the moment, allowing the airline to keep a long-term growth plan.