This article is published in Aviation Daily part of Aviation Week Intelligence Network (AWIN), and is complimentary through Mar 12, 2025. For information on becoming an AWIN Member to access more content like this, click here.
Though it is preparing to emerge from Chapter 11 bankruptcy protection, Spirit Airlines’ annual losses widened in 2024 as the ULCC battled a significant hike in its unit costs.
Spirit’s annual loss of roughly $1.2 billion in 2024 is more than double its $558.5 million loss the year prior. The airline recorded negative 22.5% operating margins as revenues fell from $5.4. billion to $5 billion year-over-year and expenses notched up from $5.9 billion to $6 billion.
The Fort Lauderdale-based airline’s adjusted unit costs excluding fuel grew nearly 13% year-over-year in 2025 to 7.97 cents while total unit revenues fell 3.7% to 9.37 cents. Spirit’s average daily aircraft utilization fell 10.8% year-over-year in 2024 to 9.9 hr. Its overall fleet grew from 205 aircraft at year-end 2023 to 213 at the end of 2024.
As it prepared to seek creditor protection in November 2024, Spirit also had to contend with aircraft groundings stemming from issues with the Pratt & Whitney geared turbofans powering its Airbus A320neo aircraft. In its March 4 regulatory filing, Spirit said “the temporary removal of engines from service is expected to continue through at least 2026.”
Spirit also disclosed details regarding its compensation package for the grounded aircraft. The airline forged an agreement with Pratt affiliate International Aero Engines (IAE) in March 2024 that entailed a monthly credit for each aircraft unavailable for operational service.
The carrier explained Pratt had agreed to issue Spirit “$150.6 million in credits related to aircraft on ground (AOG) days through December 31, 2024.” Ultimately, the entire amount was recognized last year. Spirit said it was “discussing arrangements” with Pratt for aircraft unavailable to operate after Dec. 31, 2024.
Spirit reported its growing losses after it received bankruptcy court approval on Feb. 21 to exit creditor protection in the coming weeks. Armed with that endorsement, Spirit said it would “equitize $795 million of funded debt, receive $350 million of new equity investment, and issue $840 million aggregate principal amount of new senior secured debt to existing bondholders upon emergence. In addition, Spirit will enter into a new revolving credit facility of up to $300 million.”
The stand-alone plan has drawn its share of scrutiny. After rebuffing Frontier’s last overture to merge in February, Frontier CEO Barry Biffle said, “at the end, we wish them luck. I think they’re going to end up being smaller. They almost have to be smaller in order to get their cash burn under control. And that could be good for us. Ironically, I think it’s probably bad for them over time.” At the end of 2024, Spirit had $901 million in cash and equivalents.
More recently, the head of Indigo Partners and Frontier’s board chairman Bill Franke said merging with Frontier was the “logical solution” for Spirit, but added that “nothing is happening today,” regarding further merger talks.
Related Content
