Spirit Airlines to Defer Airbus Aircraft Deliveries, Furlough Pilots to Boost Cash

(Miramar, Florida) Low-cost air carrier Spirit Airlines (NYSE: SAVE) said this morning (April 8th) that it will defer deliveries of new Airbus (EPA: AIR) planes and furlough 260 pilots in the interest of saving cash - specifically, $340 million over the next two years, according to The New York Times.

Photo of a Spirit Airlines aircraft in flight, courtesy of Spirit Airlines.

All aircraft on order that are scheduled to be delivered in 2Q2025 through the end of 2026 will be deferred to 2030 - 2031, according to today’s press release from Spirit.

Shares of Spirit Airlines (NYSE: SAVE) ended the day up 6.55%, closing at $4.72.

The furlough of 260 pilots starting September 1, 2024 comes as a result of the grounding of aircraft due to Pratt & Whitney GTF engine availability issues, along with the 2025 and 2026 aircraft deferrals, per Spirit’s press release.

As recently announced, Spirit entered into a compensation agreement with RTX Corporation (NYSE: RTX) subsidiary Pratt & Whitney regarding its GTF engines, which is estimated to improve Spirit’s liquidity between $150 million and $200 million over the term of that agreement. Additionally, Spirit will continue to evaluate the use of its current financeable asset base to add additional liquidity over the coming months, according to the press release.

"This amendment to our agreement with Airbus is an important part of Spirit's comprehensive plan to bolster profitability and strengthen our balance sheet," said Ted Christie, Spirit's President and Chief Executive Officer. "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. In addition, enhancing our liquidity provides us additional financial stability as we position the Company for a return to profitability. We would like to thank our partners at Airbus for their continued support and commitment to the long-term success of Spirit."

The Airbus amendment also defers by two years the exercise dates for optional aircraft included in Spirit's purchase agreement; there is no change to the total number of aircraft on order or Spirit options for additional aircraft, according to Spirit.

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