Spirit Airlines, Inc. (NYSE: SAVE) has reached an agreement with Airbus SE (OTC: EADSY) to defer all aircraft on order that are scheduled to be delivered in the second quarter of 2025 through the end of 2026 to 2030-2031.
The agreement is expected to improve Spirit's liquidity position by approximately $340 million over the next two years.
The deferrals do not include the direct-lease aircraft scheduled for delivery in that period, one each in the second and third quarter 2025, respectively.
Meanwhile, there are no changes to the aircraft on order with Airbus that are scheduled to be delivered in 2027-2029.
Spirit also said it intends to furlough approximately 260 Pilots effective September 1, 2024.
This is due to the result of grounded aircraft due to Pratt & Whitney GTF engine availability issues, along with the 2025 and 2026 aircraft deferrals.
Spirit's recent compensation agreement with Pratt & Whitney regarding its GTF engines is expected to improve Spirit's liquidity between $150 million and $200 million over the term of the agreement.
"Deferring these aircraft gives us the opportunity to reset the business and focus on the core airline while we adjust to changes in the competitive environment," said President and CEO Ted Christie.
The company is scheduled to announce first quarter 2024 results before market open on May 6, 2024.
Price Action: SAVE shares are trading higher by 3.61% at $4.59 on the last check Monday.