Spirit Airlines, Inc. has recently made a significant announcement regarding the deferral of its Airbus aircraft deliveries. The company has reached an agreement with Airbus to defer all aircraft scheduled for delivery in the second quarter of 2025 through the end of 2026 to the years 2030-2031. This deferral does not include the direct-lease aircraft scheduled for delivery in the second and third quarter of 2025. This agreement is expected to improve Spirit's liquidity position by approximately $340 million over the next two years.
As a result of grounded aircraft due to Pratt & Whitney GTF engine availability issues and the 2025 and 2026 aircraft deferrals, Spirit has announced its intention to furlough approximately 260 pilots effective September 1, 2024.
Additionally, Spirit recently entered into a compensation agreement with Pratt & Whitney, estimated to improve the company's liquidity by $150 million to $200 million over the term of the agreement. The company will also continue to evaluate the use of its current financeable asset base to add additional liquidity over the coming months.
Regarding these developments, Ted Christie, Spirit's President and Chief Executive Officer, stated that the amendment to the agreement with Airbus is an important part of Spirit's comprehensive plan to bolster profitability and strengthen its balance sheet. The deferral of these aircraft will give the company the opportunity to reset the business and focus on the core airline while adjusting to changes in the competitive environment. He also expressed gratitude to Airbus for their support and commitment to the long-term success of Spirit.
Christie further mentioned that the amendment also defers by two years the exercise dates for optional aircraft included in Spirit's purchase agreement, with no change to the total number of aircraft on order or Spirit options for additional aircraft.
As part of its comprehensive approach to ensuring the strength of its balance sheet and ongoing operations, Spirit has retained advisors and is taking prudent steps, including assessing options to refinance upcoming debt maturities and bonds.
These developments come as Spirit Airlines continues its commitment to delivering the best value in the sky, providing customizable travel options with an unbundled fare, and operating one of the youngest and most fuel-efficient fleets in the United States. The company serves destinations throughout the U.S., Latin America, and the Caribbean, and is dedicated to inspiring positive change in the communities where it operates through the Spirit Charitable Foundation. As a result of these announcements, the company's shares have moved 8.5% on the market, and are now trading at a price of $4.8. For more information, read the company's full 8-K submission here.
