Spirit Airlines Proposes Voluntary Exit Packages

As Spirit Airlines grapples with ongoing financial challenges, the company is instituting a voluntary exit package for its salaried employees. The move is the latest in a series of strategies designed to trim costs while the company strives to stabilize its finances into the next year.

The budget-friendly airline has experienced sluggish demand during off-peak periods and recently announced plans to ground approximately 26 Airbus A320neo aircraft for mandatory engine inspections. The inspections are in response to a manufacturing defect disclosed by RTX unit Pratt & Whitney in August. This unexpected situation has added additional pressure to Spirit’s operational capacities.

In recent developments, Spirit has put a halt on training new pilots and flight attendants, a move reported by CNBC last month. In addition, the company has applied stringent controls to expense budgets and made strategic adjustments to its network operations — including plans to withdraw its presence in Denver.

“The last few months have been a testament to our resilience and dedication as a company, but we must return to profitability, which will require a series of tough decisions. Now, we’re taking the next difficult step — enacting an Early Voluntary Out program for salaried Team Members. Based on the success of that plan, we’re implementing a similar set of opportunities to help us right-size our organization for our current fleet and business constraints.”

Ted Christie, Spirit Airlines CEO, via CNBC

Meanwhile, JetBlue Airways, which is currently in the throes of an acquisition attempt of Spirit, is facing fierce opposition. The Justice Department has already launched a lawsuit to block the proposed deal. The trial is expected to conclude in the next few days while being held in Boston, Massachusetts. This development brings an additional layer of complexity to Spirit’s already challenging landscape. The future of the airline company is uncertain for the time being.