Navigating Turbulence: Spirit Airlines To Furlough Pilots Amid Aircraft Delivery Deferrals
Portfolio Pulse from Shivani Kumaresan
Spirit Airlines, Inc. (NYSE:SAVE) has deferred all Airbus SE (OTC:EADSY) aircraft deliveries scheduled for Q2 2025 to end of 2026 to 2030-2031, improving liquidity by $340 million over two years. Despite this, Spirit plans to furlough 260 pilots from September 1, 2024, due to grounded aircraft from Pratt & Whitney GTF engine issues and the deferrals. A compensation agreement with Pratt & Whitney is expected to further improve liquidity by $150-$200 million. Spirit's shares rose 3.61% to $4.59.
April 08, 2024 | 2:58 pm
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NEUTRAL IMPACT
Airbus SE's agreement with Spirit Airlines to defer aircraft deliveries may impact its short-term revenue projections but reflects a flexible response to customer needs.
While the deferral of deliveries to Spirit Airlines could potentially delay revenue for Airbus, the agreement demonstrates Airbus's adaptability to customer requirements and may not significantly impact its stock price in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 75
POSITIVE IMPACT
Spirit Airlines defers Airbus deliveries to improve liquidity by $340M and plans to furlough 260 pilots due to aircraft groundings, with shares rising 3.61% to $4.59.
The deferral of aircraft deliveries and the subsequent improvement in liquidity, along with the compensation agreement with Pratt & Whitney, are positive financial maneuvers that could bolster investor confidence in the short term, reflected in the stock's recent price increase.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100