Proactive Investors - Spirit Airlines shares moved higher on Monday after the airline announced it was deferring an Airbus Group (EPA:AIR) aircraft order to bolster liquidity following its terminated merger with JetBlue Airways (NASDAQ:JBLU) last month.
The order, which was scheduled to be delivered in the second quarter of 2025 through to the end of 2026, will be pushed back to 2030 to 2031 which Spirit said would improve its liquidity position by approximately $340 million over the next two years.
The company noted that the deferral does not include direct-lease aircraft due to delivery in that period, one each in the second and third quarter of 2025.
There are also no changes to its aircraft on order with Airbus which are due to be delivered in 2027 and 2029.
This amendment to our agreement with Airbus is an important part of Spirit's comprehensive plan to bolster profitability and strengthen our balance sheet," Spirit CEO Ted Christie commented.
"Deferring these aircraft gives us the opportunity to reset the business and focus on the core airline while we adjust to changes in the competitive environment. In addition, enhancing our liquidity provides us additional financial stability as we position the company for a return to profitability.”
In connection with the aircraft deferral and as a result of aircraft groundings due to issues with the availability of engines from supplier Pratt & Whitney, Spirit also announced it intends to furlough approximately 260 pilots from September 1, 2024.
“Unfortunately, we had to make the difficult decision to furlough pilots given the grounded aircraft in our fleet and our deferral of future deliveries,” Christie said.
“We are doing everything we can to protect team members, while balancing our responsibility to return to positive cash flow and thrive as a healthy company with long-term growth prospects.”
Spirit shares traded up 3.3% at $4.58 on Monday morning, while Airbus' US-listed shares gained 1.4% at $46.20.