Spirit Airlines is slashing about 200 jobs as the budget carrier works to reduce costs following its November Chapter 11 bankruptcy filing.

‘We are executing on plans to rightsize our organization to align with our current fleet size and level of flying, and ultimately optimize our airline,’ Spirit said in a statement to CNBC. 

‘After reviewing our organizational structure, we have made the difficult decision to eliminate approximately 200 positions from various departments across the airline.’

Based in Dania Beach, Florida, Spirit had already furloughed hundreds of pilots and offered flight attendants leaves of absence to cut expenses. The carrier has also reduced its network and sold some of its Airbus jets to generate cash.

The airline has faced mounting challenges, including a blocked merger with JetBlue on antitrust grounds, a costly engine recall by Pratt & Whitney, and soaring labor expenses post-pandemic.

‘While we will continue to identify additional operational efficiencies, these efforts, along with our recent pilot furloughs, achieve our previously announced target of $80 million in annualized cost reductions,’ Spirit said. 

‘These decisions are never made lightly, and we are committed to treating all impacted team members with the utmost care and respect.’

The company says it plans to emerge from bankruptcy by the end of this quarter. 

Spirit Airlines is reportedly planning to file for bankruptcy following its failed merger with JetBlue

Spirit Airlines is reportedly planning to file for bankruptcy following its failed merger with JetBlue

Spirit Airlines move to file for bankruptcy protection sparked fears among flyers about mass cancellations. 

The fallout forced Spirit Airlines to provide major update on flight schedules, booking and loyalty points.  

After news broke about the bankruptcy in November, Spirit’s share price plummeted 45 percent in just seconds –  erasing hundreds of millions in market value from the carrier. It is now down by 70 percent.

The Florida-based low-cost airline is negotiating with bondholders on a restructuring plan to secure the support of key creditors, the Wall Street Journal reported this evening. It owes more than $3 billion.

Merger talks with rival Frontier Airlines – viewed as Spirit’s last shot at avoiding bankruptcy, broke down in October.

Already last year, it scaled back growth plans, furloughed staff and inked a plan to sell 23 planes. It is expected that Spirit will file for Chapter 11, a form of bankruptcy that allows it to keep operating as it bids to cut its debts. 

However, this could mean significant reductions in routes and staffing. If cost-cutting efforts fall short, the airline may face the prospect of a complete shutdown.

Spirit Airlines did not immediately respond to a request for comment.

The carrier has been losing money despite strong travel demand.

A chunk of its huge $3.3billion debt is due soon – including more than $1.1billion of secured bonds that are due in less than a year. 

It had faced an October 21 deadline from its credit card processor to refinance or extend those notes. 

In October, Spirit said it would furlough about 330 pilots on January 31 as part of its efforts to cut costs and shore up its finances. 

It has failed to report a profit in the last five out of six quarters, raising doubts about its ability to manage looming debt maturities.

Spirit has been struggling with losses and declining revenue since the pandemic. In fact, while it may have made profits some quarters, it has not turned an annual profit since even before the pandemic.

Then as travelers began to once again take to the skies, many turned to larger airlines, leaving Spirit and other budget airlines struggling to get a foothold in the market.

Frontier Airlines and Spirit Airlines first planned to merge in 2022, then but JetBlue Airways swooped in with a higher bid. That won over Spirit’s shareholders. 

Spirit executives saw the merger with JetBlue as a way to claw back a market share, but the Department of Justice argued that such a deal would violate anti-trust laws, and a judge agreed.

Spirit Airlines CEO Ted Christie previously said in June that the airline was not considering filing for Chapter 11 bankruptcy, instead saying he was 'encouraged' by the plan it had in place after the deal with JetBlue fell through

Spirit Airlines CEO Ted Christie previously said in June that the airline was not considering filing for Chapter 11 bankruptcy, instead saying he was ‘encouraged’ by the plan it had in place after the deal with JetBlue fell through

Spirit executives saw the merger with JetBlue as a way to claw back a market share, but the Department of Justice argued that such a deal would violate anti-trust laws

The judge ruled in January that the merged company would harm travelers who rely on Spirit’s low fares and said it would reduce competition.

As a result, JetBlue pulled out of a merger agreement. 

Spirit was in talks with Frontier again in October as it hoped to revive merger discussions. But Frontier walked away. 

Since the start of the year, its shares were down more than 86 percent. 

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