Spirit Airways mentioned on Monday that it could delay supply of latest Airbus planes and furlough pilots to save cash because it seeks to beat a number of setbacks, together with a blocked merger, engine issues and a lackluster restoration from the pandemic.
The funds airline mentioned in a press release that the brand new steps would save the corporate $340 million over the following two years.
Spirit has made a number of modifications aimed toward chopping prices and enhancing its monetary place since a federal decide in January blocked its plan to merge with JetBlue Airways. The decide dominated that the proposed deal would hurt customers. Spirit and JetBlue gave up an effort to enchantment that call final month.
Spirit plans to delay many of the Airbus planes it had anticipated to obtain in 2025 and 2026 by about 5 years. It additionally mentioned it anticipated to furlough about 260 pilots beginning on Sept. 1. These modifications will assist Spirit, which has misplaced cash in every of the final 4 years, return to profitability, the corporate’s chief government, Ted Christie, mentioned.
“Deferring these plane provides us the chance to reset the enterprise and give attention to the core airline whereas we alter to modifications within the aggressive surroundings,” Mr. Christie mentioned in a press release.
The airline has additionally been contending with an issue affecting the engines that energy the preferred airplane in its all-Airbus fleet, the A320neo.
Final summer season, Pratt & Whitney, which makes these engines, mentioned it had found a producing situation that might require them to be inspected nicely forward of schedule, inflicting a whole bunch of planes to be taken out of service over the following few years. Its father or mother firm, RTX, mentioned a mean of 350 planes can be grounded from 2024 by 2026, at a value of about $3 billion to the producer.
Final month, Spirit reached an settlement for compensation by Pratt & Whitney that might enhance the airline’s liquidity by $150 million to $200 million.
Spirit was struggling even earlier than the engine situation got here to mild. Whereas most U.S. airways have loved a comparatively robust restoration from the coronavirus pandemic, some funds carriers, together with Spirit, have had a harder time due to intense competitors and better prices within the locations the place they function.
