What’s Going On With Spirit Airlines (SAVE) Stock?

Spirit Airlines Inc SAVE shares are volatile Thursday, down 3% to $2.44, after reports of the furlough of about 330 pilots by January 31, 2025, as the company contends with ongoing financial challenges and rising operational costs.

What To Know: Facing a turbulent financial outlook, Spirit has implemented aggressive cost-saving strategies, targeting $80 million in annual reductions primarily through workforce downsizing.

This move includes the furlough of 186 pilots in October, and plans are in place to reassign 120 captains as first officers starting January 2025, aligning staffing levels with reduced flight schedules.

In a bid to bolster liquidity, Spirit also recently announced a $519 million agreement with GA Telesis for the sale of 23 older Airbus A320 and A321 aircraft, set to begin delivery in October 2024 and continue through February 2025.

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The sale is projected to generate $225 million in liquidity by year-end 2025, providing a critical cash infusion to support the airline’s restructuring efforts. This capital boost is crucial for Spirit as it navigates a debt-heavy financial landscape with total obligations of $3.3 billion.

What Else: The restructuring comes as Spirit approaches a crucial December deadline to refinance $1.1 billion in loyalty bonds maturing next year. The company has engaged in ongoing discussions with its bondholders to address these debt obligations, though Spirit’s financial struggles have led to speculation about potential bankruptcy options.

Spirit’s financial difficulties have also been exacerbated by the collapse of its $3.8 billion merger agreement with JetBlue Airways, which was initially seen as a potential solution to its operational and financial challenges.

Compounding these difficulties are additional fleet constraints tied to ongoing engine availability issues with Pratt & Whitney, resulting in the temporary removal of certain neo aircraft from service.

Furthermore, Spirit will retire its remaining Airbus A319ceo aircraft as part of its fleet modernization and downsizing initiatives, though six new A321neo aircraft are slated for introduction to its lineup in 2025.

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According to data from Benzinga Pro, SAVE has a 52-week high of $17.02 and a 52-week low of $1.40.