Business

Spirit Airlines Delays Airbus Orders, Furloughs Pilots to Boost Finances

Apr 8, 2024 1 min read

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Spirit Airlines has reached an agreement with Airbus to defer deliveries of all aircraft originally scheduled for the second quarter of 2025 to the end of 2026, pushing them further to 2030-2031. The move is expected to improve the airline's liquidity by approximately $340 million over the next two years. This deferral is a strategic response to grounded aircraft issues related to Pratt & Whitney GTF engine availability, which has prompted the airline to also furlough approximately 260 pilots starting September 1, 2024.

The airline's CEO, Ted Christie, has emphasized that this amendment to their purchase agreement with Airbus is a key component of Spirit's broader strategy to enhance profitability and fortify its financial foundation. Despite these changes, there are no alterations to the airline's orders for aircraft scheduled for delivery from 2027 to 2029. Additionally, the deferral extends the exercise dates for optional aircraft included in the purchase agreement.

The furloughs and deferments come at a time when Spirit is looking to strengthen its balance sheet and operations. The airline has also retained financial advisors to ensure ongoing stability. Spirit Airlines plans to release an Investor Update shortly and will announce its first-quarter results for 2024 on May 6.

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