DALLAS — Spirit Airlines (NK) and Airbus have agreed to defer the delivery of all aircraft for five years on order scheduled for 2025-2026. These deliveries will now take place between 2030 and 2031.
This deferral does not include the direct-lease aircraft scheduled for delivery during the initial period. The agreement with Airbus is expected to improve NK's liquidity by approximately US$340 million over the next two years.
Due to grounded aircraft due to Pratt & Whitney GTF engine availability issues and the deferral of aircraft deliveries, NK intends to furlough approximately 260 pilots effective September 1, 2024. Additionally, the carrier will downgrade upgraded captains from as far back as July 2018.
Spirit has also entered into a compensation agreement with Pratt & Whitney regarding its GTF engines, estimated to improve NK's liquidity by US$150 million to US$200 million over the agreement's term. Additionally, NK will continue to explore options to add liquidity by utilizing its current financeable asset base.
Spirit's Aircraft Fleet, Orders
According to the airline's 10-K annual filing in February, the airline concluded 2023 with a fleet of 205 Airbus aircraft. Firm orders for 99 planes were scheduled for delivery up to 2029.
The deferral of aircraft deliveries and the compensation agreement with Pratt & Whitney are part of NK's comprehensive plan to bolster profitability and strengthen its balance sheet. The bottom line is that these rescheduled deliveries allow the airline to focus on its core operations and adjust to changes in the competitive environment.
At the same time, Airbus aircraft may become available in the upcoming years. This could potentially benefit other carriers, as they might have the opportunity to take earlier deliveries or use these freed-up aircraft.
Featured image: Michael Rodeback/Airways
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