The airline is also planning a workforce reduction as part of cost cutting efforts in 2025.
Spirit Airlines Airbus jets (Photo: AirlineGeeks | William Derrickson)
Spirit is cutting its fleet in an effort to conserve cash. The beleaguered ultra-low-cost carrier (ULCC) is selling 23 Airbus A320 and A321 aircraft starting this month, according to an 8-K form filed Thursday.
As part of the sale, the airline said it entered into a binding agreement with aerospace firm GA Telesis on Oct. 18. The transaction’s expected purchase price is $519 million.
“We are thrilled to announce this significant acquisition, which adds a large number of highly sought-after Airbus A320ceo and A321ceo aircraft to our portfolio,” said Marc Cho, president of GA Telesis LIFT Group, in a news release. “The A320ceo family of aircraft is renowned for its efficiency, performance, and reliability, making it an attractive option for airlines across the world. We are confident these aircraft will provide significant value to our customers as they continue their operations.”
In the same filing, Spirit states that the aircraft will be delivered to the buyer between October 2024 and February 2025. The carrier has a total of 212 aircraft in its fleet, including several that are grounded due to Pratt and Whitney engine issues.
The soon-to-be-removed aircraft are older current engine option (CEO) variants. Spirit has 64 A320ceos and 30 A321ceos, data from planespotters.net shows. The sale will reduce the airline’s total fleet by nearly 11%.
With the sale proceeds and subsequent aircraft debt removal, Spirit expects to boost its liquidity by $225 million next year.
In addition, Spirit noted an $80 million cost-cutting plan in 2025, which will primarily be driven by workforce reductions. This announcement comes just weeks after the airline furloughed 186 pilots on Sept. 1.
“As part of its continued strategy to return to profitability, the Company has identified approximately $80 million of annualized cost reductions that it plans to begin implementing in early 2025,” the carrier said in the filing. “These cost reductions are driven primarily by a reduction in workforce commensurate with the Company’s expected flight volume.”
Even with reports of renewed merger talks, Spirit expects capacity to be down in the mid-teens year-over-year. The carrier just recently secured more time to refinance some of its debt, effectively delaying a bankruptcy filing.
Editor’s Note: This story was updated on Oct. 24, 2024 at 8:15 p.m. ET to add comment from GA Telesis.
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