Investing.com — Spirit Airlines (OTC:) is laying off about 200 employees as part of a broader effort to cut costs and match reduced operating capacity, CEO Ted Christie reportedly told staff Wednesday night.
The airline has previously indicated that the job cuts may be necessary as it works toward its $80 million annual cost reduction goal.
“As you all know, we are facing significant challenges in our business,” Christie wrote in a memo to employees reviewed by The Wall Street Journal. “The bottom line is we need to start a smaller airline and get back on a better financial footing.”
Spirit filed for bankruptcy last year as it struggled with heavy debt and increased competition for budget-conscious travelers. The airline also faced challenges after a federal judge blocked a proposed merger with JetBlue.
But Christie said Wednesday that the bankruptcy process is progressing according to plan and that the airline expects to emerge from Chapter 11 this quarter.
With the latest job cuts affecting multiple departments, Spirit has already laid off pilots and offered extended voluntary leave for flight attendants. While Christie noted that the airline has achieved its cost savings goal, he emphasized that Spirit continues to explore further opportunities to reduce costs and increase revenue.
The airline had nearly 13,000 employees at the end of last year, including about 2,000 non-union workers, according to court filings related to its bankruptcy proceedings.
Spirit Airlines is the largest U.S. passenger carrier to file for bankruptcy in more than a decade, marking a dramatic shift for an airline that once reshaped the industry by making air travel more affordable.
Known for its à la carte pricing strategy, Spirit charges extra for services such as water and printed boarding passes. While this approach has drawn complaints from passengers, its low fares have made it one of the fastest-growing airlines in the US.
However, Spirit has faced significant financial difficulties, losing more than $2.2 billion as of 2020 – nearly wiping out all the profits it has made since adopting its ultra-low-cost model in 2006.
