In a significant shift for the struggling airline, Spirit Airlines CEO Dave Davis has communicated to staff that further job cuts and substantial schedule reductions are on the horizon. This announcement came just weeks after the airline declared its second bankruptcy in less than a year.
Davis indicated in a memo, reviewed by CNBC, that Spirit plans to cut its capacity by 25% throughout 2024. This reduction is a strategic move to focus on the airline’s strongest markets, aiming to streamline operations amid ongoing financial difficulties. The carrier had already reduced capacity by a similar margin from its emergence from bankruptcy in March until the end of June.
The adjustments to the airline’s schedule reflect a desperate attempt to reduce costs, with Davis noting that management is currently in negotiations with vendors and aircraft lessors while evaluating the overall size of the fleet. He emphasized that these evaluations would undoubtedly impact workforce size as the airline seeks greater efficiency. “These are tough calls we must make to emerge stronger,” he acknowledged, expressing his commitment to keeping employees informed as decisions unfold.
In response to inquiries regarding the potential impact on staff, Spirit confirmed it is actively engaging with labor unions to assess how these network and fleet adjustments will influence their employees. The airline has already proceeded with furloughs and demotions, affecting hundreds of pilots, while a number of flight attendants have opted for voluntary unpaid leaves.
The atmosphere among staff is tense, with the Association of Flight Attendants-CWA alerting employees of the potential for more challenging circumstances than in the previous bankruptcy. They are prepared for any necessary actions to protect their interests, should management attempt to modify existing collective bargaining agreements.
Davis also mentioned the airline’s intentions to consult with union leaders in the coming weeks, as the landscape remains uncertain. Despite the airline’s previous reputation for low fares, high costs, changing traveler preferences, and intensified competition have severely impacted its operations. Spirit had similarly hoped to regain stability upon emerging from bankruptcy, after restructuring almost $800 million in debt through an equity swap with bondholders. However, the persistent challenges, marked by significant losses of nearly $257 million since March, have thwarted those efforts.
Earlier this month, as part of its restructuring, Spirit announced a reduction in flights to 11 destinations, signaling a conscious retreat as competitors like United Airlines, Frontier Airlines, and JetBlue unveil ambitious new flight plans to capture Spirit’s customers. The current adjustments reflect a deepening crisis for the once-thriving discount carrier, as it works to navigate a complex landscape and find a sustainable path forward.
