Thu, Oct 31, 2024
23 Planes Now Moving Out, With Workforce Reductions to Begin in Early 2025
With financial losses looming, Spirit Airlines has announced plans to sell several jets and make significant cuts to its workforce. The carrier has already finalized a half-billion dollar sale with GA Telesis and aims to start job cuts in early 2025.
On October 24, Spirit published a regulatory filing that identified nearly $80 million in potential cost reductions. The carrier noted that most of this will stem from a “reduction in workforce.” Spirit has yet to explain how many of its employees will be dropped, or from what roles.
The airline also announced a $519 million dollar agreement to sell 23 jets to aircraft service company GA Telesis. It will deliver the fleet of Airbus A320ceo and A321ceo aircraft by February. Through the deal, Spirit hopes to receive a $225 million liquidity increase by the end of 2025.
The low-cost carrier has been in a bit of a financial crisis since COVID-19. Once the pandemic passed, travel demand skyrocketed and airline competition went alongside it. Spirit was once the only way to go for budget tickets, but this dynamic quickly dissipated.
These difficulties were intensified after acquisition deals fell through. Frontier Airlines made an offer to take over Spirit in 2022 for $2.9 billion. They were outbid by JetBlue, who offered $3.8 billion, shortly after. Spirit could see light at the end of the tunnel… up until a federal Judge blocked the deal in January. The Department of Justice cited antitrust concerns as its reasoning.
Spirit has reported more than $2.5 billion in losses since the beginning of 2020. It is over $1 billion dollars in debt, and its financial hole is only growing deeper.
The budget carrier has again managed to swerve out of bankruptcy, but it can only pawn off so many employees and planes before the issue resurfaces.
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