Struggling Spirit Airlines said Wednesday it will furlough hundreds of pilots to cut down costs and bolster its finances. The move comes as the airline continues to lose money despite strong travel demand.
The low-cost carrier plans to furlough 330 pilots on Jan. 31, 2025, Reuters reported citing a company spokesperson.
In the last five out of six quarters, the company has not made a profit, making lenders anxious and doubting the company's ability to make payments on time.
The low-cost carrier furloughed 186 pilots in September and the spokesperson also revealed that on Jan. 31, 120 captains will be downgraded to first officers.
Spirit has been anticipating the merger with JetBlue Airways, but the $3.8 billion deal did not push through, putting the company in a very tight position with so much uncertainty about its future.
Since the deal collapsed, the shares of the company fell by approximately 84%, Reuters reported.
The furloughs are the result of the plan for the airline to shrink operations. It is planning to decrease its capacity by 20% in the current quarter versus last year. In 2025, the airline expects to reduce its capacity further.
"We are implementing a series of cost savings initiatives throughout our business, including a reduction in workforce, as part of our comprehensive plan to return to profitability," the airline stated, Market Watch reported.
The company plans to cut down $80 million in costs by next year, and it will be implemented primarily by reducing its workforce.
Further, Spirit will be selling 23 of its older Airbus for $519 million and the move will give the airline approximately $225 million for operations.
Ryan Muller, the head of Spirit's pilot union, revealed that pilots became concerned about their jobs following the airline's plan to reduce its fleet.
"While the company may emphasize numbers, we understand that each figure represents a dedicated pilot, their career, and their family's future," said Muller.
Last week, the company stated that the adjusted operating margin for its third-quarter would be better than the guidance it previously issued.
It also noted that it was still in talks with bondholders in relation to its debt maturities, particularly for a December deadline for a $1.1 billion refinancing scheme that is already set to mature the following year.
