Spirit Airlines has announced that it will be eliminating 200 jobs as part of its ongoing restructuring efforts after filing for Chapter 11 bankruptcy protection in November 2024.
These job cuts are intended to help the airline reduce costs as it works to recover financially. The airline, which had about 13,000 employees at the time of its bankruptcy filing, is focusing on reducing non-union positions in this latest round of layoffs.
Spirit Airlines Slashes Jobs Amid Bankruptcy and Failed Mergers
The decision to cut jobs is part of a broader strategy to streamline the airline's operations. Spirit Airlines, which faced significant financial challenges in recent years, has been working to restructure its business to address its debt, competition, and internal costs.
According to CNN, a company spokesperson stated that these cuts are separate from the Chapter 11 bankruptcy filing itself, which allows the airline to continue operations while reorganizing its debts.
The airline's financial troubles were made worse by failed merger attempts, particularly with JetBlue. A merger with JetBlue was blocked by federal regulators due to concerns about antitrust issues.
Spirit had initially supported the merger with Frontier, but the deal fell through after shareholders favored a deal with JetBlue, which was later blocked. Since then, Spirit has been struggling with its finances, losing over $2.5 billion since 2020 and facing debt exceeding $3 billion.
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Spirit Airlines Takes Steps to Cut Costs and Improve Profitability Amid Bankruptcy
As part of its efforts to reduce costs and improve profitability, Spirit has implemented several measures. This includes furloughing pilots, reducing flight capacity, and selling off some of its aircraft.
In August, the airline reached an agreement with Airbus to delay the delivery of new aircraft, further helping to reduce costs. These efforts, along with the job cuts, are part of Spirit's plan to achieve $80 million in annual savings, TechStory said.
Despite these efforts, Spirit Airlines' stock price has seen a significant decline, with a 90% drop over the year. While the stock saw a brief 21% increase following the announcement of job cuts and asset sales, concerns about the airline's long-term viability persist.
However, the company remains optimistic about its future and expects to emerge from bankruptcy in the first quarter of 2025.
