Budget airline Spirit Airlines is slashing jobs and selling jets worth millions to save costs amid financial woes and an unclear future.
Spirit disclosed around US$80 million in cost-cutting measures for early next year in a Thursday regulatory filing. The Florida-based airline said a “reduction in workforce” will trigger such layoffs.
Spirit did not mention the layoff number or positions affected. The corporate representative declined to comment Friday when contacted by The Associated Press.
The budget airline recently announced a US$519 million sale of 23 jets to aviation services provider GA Telesis. This month and February, Airbus A320ceo and A321ceo models from 2014 to 2019 will be delivered.
On Friday, GA Telesis praised the acquisition, saying it will expand its fleet. Spirit expects the sale revenues and debt discharge to boost its liquidity by US$225 million through 2025.
Spirit shares rose 25% to US$3.01 by lunchtime Friday. However, the stock has fallen nearly 80% in a year.
The previous few years have been rough for Spirit. After the COVID-19 pandemic ended and travel picked up, mounting operational expenses and competition kept the airline from being profitable. Spirit’s budget-conscious clients have been lured by competitors’ low-cost, no-frills tickets.
Since 2020, the corporation has lost almost US$2.5 billion. Spirit also owes over US$1 billion.
Spirit expects its fourth-quarter capacity to decline 20% from last year, according to Thursday’s regulatory filing. In 2025, the firm expects capacity to drop by the mid-teens, which explains this month’s sale and the removal of several planes from scheduled operation due to Pratt & Whitney GTF engine shortages.
Spirit, an intriguing takeover target, has also been rumoured to file for bankruptcy. Despite no merger success. JetBlue tried to buy Spirit, but two airlines pulled out when a federal judge halted the deal in January over antitrust concerns.
Frontier Airlines wanted to merge with Spirit before, but JetBlue outbid them. According to anonymous sources, The Wall Street Journal reported that Frontier was considering a renewed bid earlier this week.
Spirit may restructure its debt and other liabilities in bankruptcy, according to The Journal, which also reported that the airline is still in talks with bondholders. Spirit’s rep declined comment.
