Spirit Airlines shares surged after the struggling budget carrier said it would cut jobs and sell aircraft.
The carrier late Thursday laid out a plan to reduce costs and raise cash by selling 23 older Airbus aircraft. That sale will bring in $519 million, Spirit said in a securities filing.
It also said it will reduce costs by about $80 million, mostly through job cuts.
Last week the airline again delayed a deadline to refinance more than $1 billion in debt until late December, giving it breathing room with its credit card processor.
Spirit has struggled to return to profitability in the wake of the pandemic, facing a shift in travel demand and the grounding of dozens of Pratt & Whitney powered aircraft.
Even with Friday’s jump, Spirit’s shares have tumbled more than 80% this year after a judge blocked its planned acquisition by JetBlue Airways.
Spirit didn’t immediately comment on how many employees it will cut but said its 2025 capacity will be down in the mid-teen percentage point range compared with this year. It started furloughing about 200 pilots in September. Flight attendants “are well-positioned” because so many crew members took voluntary leaves of absence, according to the company.
Earlier this week, The Wall Street Journal reported that Spirit and Frontier Airlines have revived merger discussions, sending shares higher. The airlines didn’t immediately comment. The two budget airlines had a merger agreement that was derailed by JetBlue‘s April 2022 offer to purchase Spirit outright.
Late Thursday, Spirit forecast a third-quarter negative operating margin of 24.5%, better than a previous estimate for as much as a negative 29% margin for the three-month period.
