Summary

  • Spirit Airlines Master Executive Council (MEC) announced that its pilots received furlough notices.
  • At the same time, the airline’s executives received annual pay raises, which was disclosed in an SEC filing on July 1.
  • The airline has made moves to improve its liqudity, including deferring Airbus A320neo family aircraft deliveries.

Spirit Airlines pilots, represented by the Spirit Airlines Master Executive Council (MEC) of the Air Line Pilots Association, International (ALPA), have questioned the airline’s move to issue furlough notices to 200 pilots while at the same time, the low-cost carrier raised the compensation of four chief executives, including its chief executive officer (CEO).

Furloughing 200 pilots

According to the Spirit Airlines MEC, while Spirit Airlines executives received raises, 200 pilots were given furlough notices, which was a plan that the airline had initially announced in April.

Then, the airline said that it was reducing its network-wide capacity due to the groundings of its Airbus A320neo family aircraft fleet because of the Pratt & Whitney engine accelerated inspections and removals, as well as because it had deferred new aircraft deliveries from Airbus.

A Spirit Airlines Airbus A321-231 flying in the sky.

Photo: Vincenzo Pace I Simple Flying

At the time, Spirit Airlines detailed that it had planned to furlough around 260 pilots effective September 1. The delivery deferrals and the compensation given to Spirit Airlines by Pratt & Whitney due to the groundings of its A320neo family aircraft fleet could improve the company’s liquidity by as much as $540 million.

Related

Spirit Airlines Defers Airbus A320/321neo Deliveries & Plans 260 Pilot Furloughs To Save Cash

Spirit Airlines continues shoring up its liquidity, with the agreement signed shortly after its deal with Pratt & Whitney.

Compensation for grounded A320/A321neo aircraft

The sum was split between the aircraft delivery deferrals, which should save Spirit Airlines up to $340 million in the next two years, with the agreement with Pratt & Whitney adding an additional $150 million to $200 million in 2024. Potentially, the compensation from the engine maker could grow further if Spirit Airlines’ aircraft continue to be grounded due to the accelerated inspections and removals of the PW1100G engine in 2025.

According to ch-aviation data, Spirit Airlines has 104 Airbus A320neo family aircraft, namely 91 A320neo and 13 A321neos. Out of the 91 A320neos, 18 are currently grounded, while all 13 A321neo aircraft are currently marked as active by the airline intelligence and data site.

Spirit Airlines aircraft at LAS shutterstock_2439227217

Photo: GingChen | Shutterstock

Meanwhile, data from the aviation analytics company Cirium showed that in July, the airline has scheduled 6,162 weekly flights, amounting to 1.1 million weekly seats and 1.8 billion available seat kilometers (ASK). During the same month in 2023, Spirit Airlines had scheduled 5,574 weekly flights, resulting in 1 million weekly seats and 1.7 billion weekly ASKs.

However, while flights with the A321neo have increased massively – due to the airline only having 24 weekly departures with the A321neo in July 2023 – weekly flights with the A320neo are scheduled to only grow by 3.9%, compared to 14.6% and 13.3% growth with the A320ceo and A321ceo, respectively.

Related

Spirit Airlines Is Making Big Network Changes To Overcome Its Challenges

International flying has taken a particularly big hit recently.

Executive compensation

On July 1, Spirit Airlines filed a document with the United States Securities and Exchange Commission (SEC), which announced the appointment of Frederick Cromer as executive vice president and chief financial officer (CFO) effective July 8. Cromer has replaced Scott Haralson, who left the company on June 14.

The same filing detailed that four executives, including Ted Christie, the president and CEO, John Bendoraitis, the executive vice president and chief operating officer (COO), Matthew Klein, the executive vice president and chief commercial officer (CCO), and Rocky Wiggins, the senior vice president and chief information officer (CIO) had received salary increases effective July 1.

Spirit Airlines Airbus A320 at Raleigh-Durham International Airport.

Photo: Raleigh–Durham International Airport

Christie, Bendoraitis, Klein, and Wiggins will now earn a base annual salary of $950,000, $650,000, $525,000, and $500,000, respectively, with the three latter executives also receiving long-term initiative (LTI) or short-term initiative (STI) bonuses. Cromer’s annual salary was announced to be $610,00.

In comparison, Christie, Bendoraitis, Klein, Wiggins, and Haralson, who Cromer will now succeed, earned an annual salary of $750,000, $440,000, $400,000, $375,000, and $400,000, respectively, in 2023, according to the airline’s 2024 proxy statement released on April 25.

Related

Spirit Airlines Will Close Its Crew Base At Atlantic City International Airport

The news comes as the airline is reducing its capacity with deferred deliveries and the accelerated removals and inspections of the PW1100G engines.

Leave a Reply

Your email address will not be published. Required fields are marked *