A Spirit Airlines Airbus A320 takes a taxi at Los Angeles International Airport after arriving from Boston in Los Angeles, California on September 1, 2024.
Kevin Carter | Getty Images News | Getty Images
Spirit Airlines is preparing to scale back in an effort to survive, according to a new plan expected to be announced in U.S. Bankruptcy Court on Tuesday.
The low-cost travel icon is set to announce the disposal of more Airbus planes as it aims to emerge from bankruptcy for the second time in less than a year. According to the agreement, they are expected to appear in late spring or early summer.
At the time of its second bankruptcy, Spirit was negotiating deals with the following companies: frontier airlinesand with investment firm Castle Lake.
According to the plan, Spirit’s new fleet will consist primarily of older Airbus planes.
According to the plan, Spirit’s annual fleet costs will be reduced by an additional $550 million, or 65% from before the company filed for bankruptcy last year. The debtors also note an additional $300 million in cost savings from non-aircraft reductions.
Spirit has already cut some of its Airbus fleet and furloughed pilots and flight attendants to cut costs as its network shrinks, but some flight attendants have returned to work ahead of spring break.
Spirit’s new plans will be challenging. That would pit smaller versions of the Spirit against increasingly larger competitors that dominate the U.S. market. Some low-cost U.S. airlines have struggled due to soaring labor and other costs in the wake of the coronavirus outbreak, a growing consumer shift toward more upscale travel, and increased competition from larger airlines offering lower fares.
The Spirit was uniquely challenged by a major engine recall from the United States. pratt & whitney Plans to be acquired by the company failed jet blue airlinesthe deal was rejected by a federal judge in early 2024.
Spirit expected net income to be $252 million last year, according to a December 2024 court filing. But in an August report, it said it lost nearly $257 million in the months from March 13 to the end of June, after emerging from its first Chapter 11 bankruptcy. Less than a month later, the company filed again for Chapter 11 bankruptcy protection.
