Spirit Airlines places pilots on furlough amid financial issues

Spirit Airlines continues to face financial problems that causes concern as the trend goes back several years.
Spirit Airlines' Stock Continues To Drop After Merger With Jetblue Blocked By Federal Judge
Spirit Airlines' Stock Continues To Drop After Merger With Jetblue Blocked By Federal Judge / Brandon Bell/GettyImages

Spirit Airlines is a safe haven for travelers looking for “cheap” flights, but the company is facing some tough challenges ahead. And these challenges come after a series of other financial problems that do not bode well.

Spirit Airlines latest earnings call revealed a net loss of $183.65 million or $1.68 per share. This is an improvement compared to the $270.66 million that was reported within the same quarter a year prior. But that improvement is hard to see as the airline suffered yet another failing quarter that dates back multiple years.

The continued financial issues caused some to raise the idea of bankruptcy for the airlines. This comes after the attempted acquisition by JetBlue Airways, but that was blocked by a federal judge. This sentiment is growing as Spirit Airlines announced new moves such as placing 260 pilots on furlough and delaying the deliveries of the new Airbus planes that were scheduled for purchase through 2031.

“This amendment to our agreement with Airbus is an important part of Spirit’s comprehensive plan to bolster profitability and strengthen our balance sheet,” said Ted Christie, Spirit CEO and President. “Deferring these aircraft gives us the opportunity to rest the business and focus on the core airline while we adjust to changes in the competitive environment.”

The pilots impacted by the furlough begins on September 1. They were informed that if things change in the airline’s financial status, they will be welcomed back into active service.

“I am extremely proud of our dedicated Spirit team for their focus and resilience over the last few years,” Christie said. “Unfortunately, we had to make the difficult decision to furlough pilots given the grounded aircraft in our fleet and our deferral of future deliveries.”

This is a situation to watch as travel is expected to continue to pick up momentum this year. With so much revenue poised to generate this travel season, it will also impact the prices that are put in front of customers. This is why a discount airline going through financial trouble could spell further issues for travelers. Keep a close eye on the financial outlook for Spirit Airlines in the upcoming months to the year.