Spirit’s Air Line Pilots Association (ALPA) Master Executive Council (MEC) – which represents the carrier’s roughly 3,000 pilots – has warned members that the airline is in a “fragile financial position” and encouraged pilots to take a “clear-eyed” look at their personal situations.
Tuesday’s message – which was viewed by AirlineGeeks – follows the ultra-low-cost carrier’s disclosure in its latest SEC filing that there is “substantial doubt” about the company’s ability to continue operating over the next year without significant changes.
Spirit MEC chair Captain Ryan Muller told pilots that Spirit reported a second-quarter pre-tax loss of about $250 million, bringing its year-to-date loss to roughly $560 million. Management has taken steps, including network changes, spare engine sale-leasebacks, cost reductions, and three rounds of pilot furloughs since September 2024, Muller added.
The airline has furloughed over 500 pilots at the time of writing.
“We won’t sugarcoat it: Spirit is in a fragile financial position. The reality we face today is not the one many of us envisioned when we joined this airline,” the letter states.
Even with these measures, the union said Spirit does not expect results to improve quickly enough to meet minimum liquidity covenants tied to debt agreements and a credit card processing contract. Additional potential actions include selling or monetizing aircraft, real estate, and excess airport gate capacity.
“Management cautions there is no guarantee these initiatives will succeed; failure could trigger covenant defaults and debt acceleration,” he added.
The MEC also noted that Spirit’s credit card processor is requesting more collateral before renewing its agreement, which expires in December 2025, a move that could reduce unrestricted cash.
While the union said it will continue working to protect jobs and pursue a third furlough mitigation agreement, it urged pilots to prepare for a range of possible outcomes.
“Each pilot must ultimately decide what is best for themselves and their families,” Muller told members. “We urge you to take a clear-eyed look at your personal situation, explore all available options, and prepare for a range of possible outcomes.”
CEO Pushes Back
In a separate message to Spirit employees seen by CBS News, Spirit CEO Dave Davis shared that this disclosure was required by the airline’s auditors.
“Let me start by providing some context around what’s included in the report. The report uses the phrase ‘substantial doubt about the Company’s ability to continue as a going concern.’ This is a phrase required by our outside auditors to convey that there is risk if we do not make changes. But, we are,” he said.
