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Last month, I wrote about Spirit Airlines reaching agreements in principle with the two major unions representing its frontline employees: the Air Line Pilots Association (ALPA) and the Association of Flight Attendants-CWA (AFA). This marked a critical milestone in Spirit’s Chapter 11 restructuring process (as the carrier works to secure essential bankruptcy financing and stabilize operations). Earlier this month, Spirit shared that it had scrapped its plans to furlough hundreds of pilots without pay since there had been a sharp increase in voluntary resignations as pilots left the low-cost carrier amid ongoing uncertainty. Today, Spirit announced another step forward with both the pilots and flight attendants ratifying the proposed agreements. These are subject to court approval, but this is more movement forward.
The agreements are intended to reduce labor costs and ensure Spirit can meet the financial conditions tied to its current financing. This financing was approved last month by a New York bankruptcy court and provides up to $475 million in funding with $200 million already released to sustain daily operations. More funding is vital to keeping Spirit’s fleet operating and maintaining cash flow. This was contingent on reaching labor concessions with its pilot and flight attendant groups.
Spirit’s management had also committed to taking executive pay reductions proportionate to the concessions agreed upon by its pilots. The airline’s leadership team described the agreements as a pivotal step in ensuring long-term viability as it allows Spirit to preserve jobs and maintain essential routes while it reorganizes under court supervision.
Dave Davis, President and Chief Executive Officer of Spirit Airlines, said:
We’re thankful to our partners at ALPA and the AFA for their collaboration in reaching these agreements and to our Pilots and Flight Attendants for the unwavering dedication and professionalism they demonstrate every day. We’re pleased to reach another milestone in our restructuring, moving us forward in our mission to better position the airline and secure a future with value travel options for Americans.”
Anthony’s Take: I’m still rooting for Spirit Airlines and hoping it makes it out with a successful path forward. What that looks like is still anyone’s guess and it could involve a merger in the future.
(Featured Image Credit: Spirit Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
