Spirit Airlines pilots, flight attendants accept pay cuts to help avert bankruptcy

Spirit Airlines’ pilots and flight attendants have agreed to wage and benefits concessions in a bid to steer the budget carrier away from bankruptcy as it restructures under Chapter 11. The deal with the Air Line Pilots Association (ALPA) and the Association of Flight Attendants-CWA (AFA) was announced after the two unions voted to accept the terms, which would take effect Jan. 1 and run for two years, subject to court approval. "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," CEO Dave Davis said in a December 12 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."

Pilots would see an eight percent cut in hourly pay and a reduction in retirement contributions from 16 percent to eight percent, while flight attendants would not have base pay reduced but would see overtime rates fall from 150 percent to 100 percent, according to AFA and ALPA statements cited by The Sun Sentinel. The unions said the measures are designed to reduce labor costs and help the airline raise capital and reduce debt in an effort to avoid bankruptcy. The combined savings are projected at about $100 million, with ALPA estimating $85 million and AFA about $15 million.

The deal, if approved by the court, would be implemented on January 1 and last two years, with possibilities for revision if the company's fortunes improve. Spirit has warned it expects continued losses into 2027 and has been actively reducing capacity and workforce as part of its restructuring. The company has not posted an annual profit since 2019 and has reported substantial losses this year.

The cost-cutting accompanies a series of operational adjustments. Spirit furloughed 1,300 flight attendants effective December 1 and 270 pilots in July, and in September cut about a quarter of its scheduled flying to focus on its core network, the airline said. Despite the belt-tightening, Spirit plans to remain in service during restructuring, and passengers can still book flights, use tickets, credits and loyalty points as usual. Debt holders previously agreed to exchange $795 million in debt for equity in the last bankruptcy, but the airline avoided more drastic measures such as sweeping planes from service. Spirit's assets and liabilities have been estimated in a wide range, from $1 billion to $10 billion, according to recent disclosures.

The airline hopes the concessions and ongoing restructuring will help restore profitability in the longer term. The company has signaled that it expects to return to profitability by 2027, with an industry forecast suggesting a potential $219 million profit if market conditions and the restructuring progress align. Spirit has emphasized its commitment to maintaining service during the process and to delivering safe, reliable operations for travelers.