Spirit Airlines announced this Monday that it has reached an agreement with Airbus to delay all aircraft deliveries scheduled from the second quarter of 2025 to 2026, in addition to seeking to furlough about 260 pilots, while the company takes actions to save cash.
The low-cost airline said it would defer scheduled deliveries until 2030-2031. As a result of these delays, which come on top of quality problems with engines made by supplier Pratt & Whitney, Spirit will furlough pilots starting September 1.
Spirit shares rose about 5% in early trading.
A problem with Pratt & Whitney Geared Turbofan engines has forced Spirit to ground some of its A320neo planes, impacting the company just as it is already facing a liquidity crisis.
The deal with Airbus would improve Spirit's liquidity by about $340 million over the next two years, the airline said, adding that there were no changes to its orders scheduled to be delivered during 2027-2029.
“(The) aircraft deferrals and pilot suspensions seem positive, in terms of helping the airline reduce (or) defer some costs. However, among other factors, the airline is now also likely to reduce its revenue generation opportunities,” Citi Research analyst Stephen Trent wrote in a note.
Spirit, which has been losing money for several quarters despite strong travel demand, operates an all-Airbus fleet. As of December 2023, the company had a total of 205 Airbus aircraft.
The airline now expects to end 2025 with a total of 219 aircraft in its fleet, without adding the A320neo aircraft. It previously hoped to add six A320neo aircraft in 2025 and increase its fleet to 234 aircraft.
The suspensions “are deeply concerning to our entire group of pilots,” said Ryan Muller, president of Spirit's Chief Executive Council at the Air Line Pilots Association.
The council and a negotiating committee were exploring voluntary measures that could mitigate the need or number of suspensions required, Muller added.