Spirit Airlines has struck a deal with Airbus to postpone the delivery of all aircraft slated for the second quarter of 2025 through the end of 2026 to the period between 2030 and 2031. Notably, this deferral excludes the direct-lease aircraft set for delivery during this timeframe, with one each in the second and third quarter of 2025. The arrangement with Airbus is anticipated to bolster Spirit's liquidity by approximately US$340 million over the next two years.
However, there are no alterations to the aircraft on order from Airbus scheduled for delivery between 2027 and 2029.
Due to grounded aircraft resulting from Pratt & Whitney GTF engine availability challenges, coupled with the deferral of 2025 and 2026 aircraft deliveries, Spirit has announced plans to furlough around 260 pilots effective September 1, 2024.
Recently, Spirit entered into a compensation agreement with Pratt & Whitney concerning its GTF engines, estimated to enhance the airline's liquidity by US$150 million to US$200 million throughout the agreement's duration. Additionally, Spirit will explore leveraging its existing financeable assets to further boost liquidity in the coming months.
Ted Christie, President and CEO of Spirit, emphasised the significance of the Airbus agreement in fortifying the airline's profitability and balance sheet. He expressed gratitude to Airbus for their ongoing support and commitment to Spirit's long-term success.
Christie acknowledged the dedication and resilience of Spirit's team amid challenges, noting the regrettable decision to furlough pilots due to grounded aircraft and deferred deliveries. He underscored the company's efforts to safeguard team members while striving for positive cash flow and long-term growth.
The Airbus amendment also extends the exercise dates for optional aircraft included in Spirit's purchase agreement by two years, with no change to the total number of aircraft on order or Spirit's options for additional aircraft.
As part of its strategic initiatives, Spirit has engaged Perella Weinberg & Partners L.P. and Davis Polk & Wardwell LLP as advisors. The company remains committed to fortifying its balance sheet and operational resilience, including exploring options to refinance upcoming debt maturities and bonds. (£1.00 = US$1.27 at time of publication).
