Spirit Airlines will defer Airbus orders, furlough 260 pilots in race to shore up liquidity

Spirit
Airlines
said
Monday
that
it
will
defer
deliveries
of
new
Airbus
planes
and
that
it
plans
to
furlough
about
260
pilots
as
it
tries
to
boost
liquidity.

“Of
course,
these
steps
aren’t
ones
we
want
to
take
but
they’re
necessary
to
ensure
a
strong
and
profitable
future
for
Spirit,”
CEO
Ted
Christie
said
in
a
note
to
staff
Monday.

Spirit
said
it
will
defer
all
Airbus
planes
it
has
on
order
that
were
scheduled
to
be
delivered
from
the
second
quarter
of
2025
through
the
end
of
2026.
It
will
instead
take
delivery
of
them
in
2030
and
2031.
The
deferrals
do
not
include
the
direct-lease
planes
—
one
apiece
in
the
second
and
third
quarter
of
next
year
—
nor
scheduled
deliveries
for
2027
through
2029,
Spirit
said.

The
budget
airline
said
the
deferrals
would
boost
its
liquidity
by
about
$340
million
over
the
next
two
years.

“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,”
Christie
said
in
a
news
release.

Miramar,
Florida-based
Spirit
has
been
looking
for
ways
to
boost
liquidity
and
convince
investors
that
it
is
on
track
to
do
so
as
it
struggles
with
the
the
grounding
of
many
of
its
Airbus
planes
because
of
a


Pratt
&
Whitney
engine
recall.
Its
planned
acquisition
by


JetBlue
Airways

fell
apart
earlier
this
year
after
a
federal
judge

ruled
in
January
that
the
deal
would
be
anti-competitive.

The
airline
said
March
29
that
it
will
receive
monthly
payments
in
compensation
for
the
grounded
Pratt
&
Whitney
engines
through
the
end
of
2024,
which
would
lift
liquidity
between
$150
million
and
$200
million.

The
pilot
furloughs
would
take
effect
in
September,
Spirit
said
Monday.
The
airline
already
had
leaves
of
absence
in
place
for
flight
attendants
and
there
is “no
plan”
for
cabin
crew
furloughs,
their
union,
the
Association
of
Flight
Attendants
told
members
Monday.
Spirit
is
closing
its
Atlantic
City,
New
Jersey,
crew
base
and
staff
will
be
reassigned.

Spirit’s
Airbus
delivery
slots
are
likely
to
be
in
high
demand.
Airlines
have
adjusted
their
hiring
and
training
in
recent
weeks,
citing
a
scarcity
of
aircraft
—
a
sharp
change
from
the
pilot
shortage
that
worsened
when
travel
demand
snapped
back
after
the
worst
of
the
pandemic.

United
Airlines
pilots’
union
last
month
said
the
company
is
offering

unpaid
time
off
for
pilots
next
month
because
of
late-arriving
planes
from


Boeing.
The
carrier
said
it
was
also
removing
Boeing’s
Max
10
jets
from
its
fleet
plan
because
it
was
unclear
when
regulators
would
certify
the
planes.
United
declined
to
comment
on
whether
it
will
take
Spirit’s
Airbus
delivery
slots.

An
Airbus
spokeswoman
said
the
slots
could
be
remarketed,
but
she
declined
to
comment
on “any
conversations
we
may
or
may
not
be
having
with
various
customers.”

The
Air
Line
Pilots
Association,
Spirit
pilots’
union,
said
Monday
it
is
exploring
voluntary
measures
that
could
limit
the
number
of
pilot
furloughs.

“Coupled
with
the
retirement
of
our
A319
fleet
and
the
ongoing
Pratt
&
Whitney
GTF
engine
issue,
the
airline
finds
itself
with
more
pilots
than
its
operations
require,”
Ryan
Muller,
chairman
of
the
Spirit
ALPA
chapter,
said
in
an
emailed
statement. “The
ramifications
of
the
Company’s
announced
decision
are
deeply
troubling
for
our
entire
pilot
group.”

Spirit
said
in
the
filing
that
it
plans
to
publish
its
next
financial
outlook
for
the
quarter
and
full
year
within
the
next
week.
It
is
scheduled
to
report
first-quarter
results
before
the
market
opens
on
May
6.