Spirit Airlines confirmed Friday it finalized crucial agreements with its unionized pilots and flight attendants to cut labor costs as part of its effort to reorganize its finances while in Chapter 11 bankruptcy.
Management offered no details of the deals with the Spirit contingents of the Air Line Pilots Association and Association of Flight Attendants – CWA. But the airline reportedly had been seeking up to a combined $100 million in concessions from the two labor groups as a condition for obtaining additional financing to stay airborne.
An AFA spokesperson affirmed by email Friday that the value of the pilots’ concessions amounted to $85 million while the attendants yielded $15 million, with the latter amount just below a half of what management had sought. There were no flight attendant pay rate cuts, the person said. “The main concession was lowering overtime pay [currently at 150%] to 100% along with a few other provisions.”
But the approval of both deals came shortly after 1,300 flight attendants were “involuntarily furloughed,” a move that became effective Dec. 1, the AFA spokesperson said.
“Another milestone”
“We’re thankful to our partners at ALPA and the AFA for their collaboration in reaching these agreements and to our Pilots and Flight Attendants for the unwavering dedication and professionalism they demonstrate every day,” Dave Davis, Spirit’s president and chief executive officer, said in a statement “We’re pleased to reach another milestone in our restructuring, moving us forward in our mission to better position the airline and secure a future with value travel options for Americans.”
Earlier this week, ALPA’s national office in Washington, D.C., released a statement suggesting the company did not achieve everything it sought, adding that the agreement reached by union and management negotiators covered a two-year period. The agreement, the union said, “supports Spirit’s ongoing Chapter 11 restructuring and is subject to Bankruptcy Court approval.”
The union said the pilots ratified the deal with a vote of 82% in favor, with 78.95% of eligible pilots participating. The ratification came after previous rounds of pilot furloughs and demotions dating back to last year.
The flight attendants’ agreement is also for two years with a restoration provision. The union said 74% of those who voted approved the agreement; 67% of those eligible to vote participated.
In late August, for the second time in less than a year, Spirit filed for Chapter 11 bankruptcy protection from its creditors, saying it would undertake dramatic cost-cutting measures that had not been addressed the first time around. One of those areas included the revision of labor contracts that typically cover pay, work rules and benefits.
The budget airline, which is headquartered in Dania Beach, continued to hold the biggest market share at Fort Lauderdale-Hollywood International Airport through October, according to airport statistics.
“Difficult choice”
“This vote represents Spirit pilots’ direct investment in the airline’s future,” Captain Ryan P. Muller, chairman of the Spirit Airlines Master Executive Council, said in the union statement. “Spirit pilots made a difficult choice that provides the Company with what it needs from labor to secure financing and complete its restructuring.”
The statement said ALPA negotiators “preserved all core work rules, including all scheduling and quality-of-life provisions.”
“The Company sought far deeper cuts … but we held the line,” Muller said. “Instead, we negotiated temporary reductions to pay rates and retirement contributions effective January 1, 2026.”
“Full restoration,” he said, “occurs through guaranteed increases on August 1, 2028, and January 1, 2029. Company-funded retirement contributions will be fully restored by July 1, 2029.”
The union also said the pilots “secured a $278 million unsecured bankruptcy claim, providing [a] direct financial stake in Spirit’s successful emergence from bankruptcy.”
He said the union averted an outright “rejection” or cancellation of its contract. Under the U.S. Bankruptcy Code, management would have been entitled to pursue that avenue if no deals had been achieved.
No profits until 2027
Management said in an October regulatory filing that it doesn’t expect to turn a profit until 2027, with $804 million in losses this year and a $145 million deficit in 2026.
It forecast a $219 million profit for 2027, made possible in part by a significant cut in the number of planes it flies, route adjustments, furloughs, asset sales and labor concessions such as those reached in the fourth quarter of this year.
The company has not made a profit since 2019.
