Latest News

Spirit Airlines reaches tentative cost-saving labor deals amid bankruptcy proceedings

Spirit Airlines announced on Friday that it had reached tentative agreements with the unions representing both its pilots as well as its flight attendants. The tentative agreements would include some contract concessions as Spirit Airlines tries to reduce costs in its ongoing Chapter 11 restructuring.

Once a tentative contract is ratified, the airline's senior leadership team will also accept salary reductions of a certain percentage.

Earlier this year, the ultra-low-cost-carrier filed for Chapter 11 bankruptcy protection for the second time as it grappled with dwindling cash reserves and mounting losses.

Spirit, as part of its cost-cutting program, has reduced the number of employees, trimmed routes, and scaled back operations to stabilize finances and avoid bankruptcy.

The company announced on Wednesday that it would be discontinuing its service at five airports including Milwaukee and Phoenix.

"Following extensive negotiations in response to the company's demand for pilot cost savings, Spirit pilots have reached an Agreement-in-Principle with Spirit Airlines on modifications to their collective bargaining agreement," the Air Line Pilots Association said on Friday.

Both agreements are subject to pilots' and flight attendants' ratification and court approval.

Spirit said the agreements in principal are expected to generate savings annually sufficient to meet its financial targets for the next draw under the debtor-in possession financing.

(source: Reuters)