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Spirit Airlines shares saw a significant increase after the budget carrier announced plans to cut jobs and sell aircraft. The company revealed a strategy to lower costs by selling 23 older Airbus planes, generating $519 million in revenue. Additionally, Spirit plans to reduce costs by approximately $80 million, mainly through workforce reductions. This move comes as Spirit faces challenges in returning to profitability following the impact of the pandemic and issues with Pratt & Whitney powered aircraft.
Despite the recent surge in share price, Spirit’s stock has dropped over 80% this year due to various factors, including the blocked acquisition by JetBlue Airways. The airline has not disclosed the exact number of job cuts, but it anticipates a mid-teen percentage decrease in capacity for 2025 compared to this year. In September, Spirit began furloughing around 200 pilots, while flight attendants have been relatively unaffected due to voluntary leaves of absence taken by crew members.
Recent reports suggest that Spirit and Frontier Airlines have reignited talks of a potential merger, which has led to increased stock prices for both carriers. These discussions come after a previous merger agreement was disrupted by JetBlue’s offer to acquire Spirit in April 2022. Despite the challenges faced, Spirit forecasts a third-quarter negative operating margin of 24.5%, an improvement from previous estimates.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
