Spirit Airways inventory is rising because the airline plans to promote planes and reduce jobs
Spirit Airlines luggage tags are seen near a check-in counter at Austin-Bergstrom International Airport on April 10, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Spirit Airlines Shares rose sharply on Friday after the troubled budget airline said it would cut jobs and sell planes.
The stock closed the day up 16% at $2.79 per share.
The airline laid out a plan late Thursday to cut costs and raise money by selling 23 older Airbus planes. That sale will raise $519 million, Spirit said in a securities filing.
It also said it would cut costs by around $80 million, primarily through job cuts.
Last week, the airline again pushed back the deadline for refinancing more than $1 billion in debt to the end of December to gain breathing room with its credit card processor.
Spirit has struggled to return to profitability in the wake of the pandemic as travel demand shifted and dozens of trips were canceled Pratt & Whitney Motorized aircraft.
Despite Friday's rise, Spirit's shares have plunged more than 80% this year after a judge blocked its proposed takeover JetBlue Airways.
Spirit Airlines jetliner on the tarmac at Fort Lauderdale Hollywood International Airport. (Joe Cavaretta/South Florida Sun Sentinel/Tribune News Service via Getty Images)
Joe Cavaretta | South Florida Sun Guardian | Getty Images
Spirit didn't immediately comment on how many employees it will cut, but said its capacity will decline by about 10 percentage points in 2025 compared to this year. It began furloughing around 200 pilots in September. Flight attendants are “well positioned” because many crew members have taken voluntary leave, the company said.
Earlier this week, the Wall Street Journal reported that Spirit and Frontier Airlines have revived merger talks and pushed up share prices. The airlines did not immediately comment. The two low-cost airlines had a merger agreement that fell through JetBlueApril 2022 offer to purchase Spirit in full.
Late Thursday, Spirit forecast a negative operating margin of 24.5% for the third quarter, better than an earlier estimate that even called for a negative margin of 29% for the three-month period.
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