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.
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?
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