It’s a tough time for Spirit Airlines. Several weeks ago, the airline filed for Chapter 11 bankruptcy for the second time in a matter of months, in a move that should’ve surprised no one (well, except the company’s management, seemingly).
While Spirit kind of squandered its first Chapter 11 bankruptcy (by not actually making any structural changes), the airline is making serious changes this time around. Unfortunately it’s very bad news for employees.
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Spirit Airlines reducing capacity, furloughing employees
In the coming weeks, Spirit plans to reduce its overall capacity by around 25%, and suspend service to around a dozen airports. This is happening for a variety of reasons, including an effort to cut the most unprofitable flying, plus needing to return planes to leasing companies.
As you’d expect, along with that reduction in capacity comes a reduction in staff. The airline has announced that as of December 1, 2025, it’ll furlough roughly 1,800 flight attendants, making up around one-third of that workforce. We can expect a similar percentage of pilot jobs to be cut. While these furloughs are of course being described as temporary, I wouldn’t count on that…
Even beyond those who are being furloughed, you can expect that Spirit will be looking to renegotiate its labor contracts, to improve its cost structure. Obviously Spirit has no choice but to cut capacity, though I certainly feel for the Spirit employees who are being furloughed.
As much as Spirit has a reputation for its rowdy customers, the airline largely has phenomenally friendly employees, and I’ve especially found that to be true of flight attendants. The airline industry is full of passionate people, and furloughs like this can’t help but make you sad.
Can Spirit Airlines shrink its way into survival, success?
Coming out of the pandemic, Spirit’s margins have just been beyond awful, by far the worst in the industry. Bizarrely, the company’s first round of Chapter 11 bankruptcy only addressed debt issues, and didn’t address the carrier’s unsustainable business plan.
So when Spirit got hundreds of millions in new funding, that lasted the airline for a matter of months, since operational losses like what we’ve seen at Spirit can’t be sustained.
Now Spirit management is making the tough decisions that should’ve been made during the first bankruptcy, like reducing the size of the fleet, focusing on costs, etc. Short of just liquidating, this is without a doubt the right thing to do.
That being said, is there any hope at this point, or is it all too little, too late? A few thoughts:
- Especially when you’re a cost focused airline, it’s really hard to shrink into profitability, since keeping low unit costs relies on continued growth
- Spirit has so many legacy debt issues, so is worse positioned for success than a startup airline would be
- With Spirit currently going through bankruptcy for a second time all while slashing its network, I imagine the carrier’s forward bookings are taking a beating, since travelers can’t reliably book Spirit flights and count on them operating, given all the risks
- Spirit is being attacked left and right by other airlines, which smell blood, and are duplicating Spirit’s more lucrative routes
At this point, it seems like Spirit’s only real chance of survival is to somehow adopt a Sun Country-style model, and carve out a couple of big markets where it can compete efficiently, and go all-in on that. But even there, the uphill battle seems huge.
Bottom line
Spirit Airlines is slashing its network this fall, as the airline goes through its second Chapter 11 bankruptcy process. With the airline cutting capacity by around 25%, the company is also furloughing roughly one-third of its inflight crew members, including flight attendants.
It’s sad to see people in the airline industry getting furlough notices, though unfortunately this seemed entirely unavoidable. Even for those who are sticking around, labor concessions are almost certain as well.
What do you make of Spirit slashing capacity and furloughing employees?
What do you expect from a company whose business model was abusing customers. Whose management was proud, yes proud, of providing the worst possible experience to their passengers. It is remarkable they lasted this long.
Honestly this is all concerning about the short to medium term health of the domestic travel industry. Spirit is cutting capacity, hotel revenues have been flat to down for a year, Las Vegas traffic is down, etc. The only segment that seems to be doing very well is some cruise lines. The weird thing is that it is not due to a lack of a demand (outside of the steep decline of international travel to...
Honestly this is all concerning about the short to medium term health of the domestic travel industry. Spirit is cutting capacity, hotel revenues have been flat to down for a year, Las Vegas traffic is down, etc. The only segment that seems to be doing very well is some cruise lines. The weird thing is that it is not due to a lack of a demand (outside of the steep decline of international travel to the US, and we know who to blame for that), or lack of willingness to travel... It's more due to lack of profitability on the business side. Ultimately we probably need an adjustment period where incomes rise more so that people can absorb the higher prices that will inevitably hit airfare and such.
It is indeed sad to see an airline fail but let's not forget that the US pumped tens of billions of dollars into the US airline industry as well as the larger global economy which kept other airlines from failing.
There is no assurance that enough capacity or enough weak airlines have been removed from the US airline industry which has posted collectively lower margins than it has seen for decades.
Companies have...
It is indeed sad to see an airline fail but let's not forget that the US pumped tens of billions of dollars into the US airline industry as well as the larger global economy which kept other airlines from failing.
There is no assurance that enough capacity or enough weak airlines have been removed from the US airline industry which has posted collectively lower margins than it has seen for decades.
Companies have used chapter 11 to shrink to profitability but C11 or 22 cannot fix broken business models which is what the ultra low cost model is; higher cost carriers with larger networks are very adept at matching ultra low cost carrier fares and removing any advantage of lower cost, smaller carriers.
The chances are high that NK will make deep cuts to its employee count and compensation, reject lots of airplane leases including those aircraft w/ broken GTF engines and will be acquired by Frontier which was the plan years ago before JetBlue interfered w/ the then-planned F9/NK merger.
It's unfortunate how many people wish the demise of Spirit. Most haven't even flown the airline ever, but base their opinion on short videos they've seen depicting violence and poor guest behavior. Nothing shocks me about this planet anymore. People had the same nasty things to say about Carnival during covid.
^^Relative to only the comments here, I believe there are a lot of trolling folk who belive they are humorous when making said 'sad' comments..^^ I agree with you
Right before the holiday season, it's so sad that families are going to facing this stress. All the best to them
Spirit most likely won't be around much longer.
Buh-bye!
Why is it so hard just to put them out of their misery already. PULL THE PLUG!!!!