Investing.com — Spirit Airlines (OTC:) is laying off nearly 200 employees as part of a broader effort to reduce costs and align with its reduced operating capacity, CEO Ted Christie reportedly announced to the staff on Wednesday night.
The airline has previously indicated that the job cuts may be necessary as it moves toward its goal of cutting $80 million in annual costs.
“As you all know, we are facing many challenges in our business,” Christie wrote in a message to employees viewed by The Wall Street Journal. “The bottom line is, we need to run a smaller airline and get back to a better financial position.”
Spirit filed for bankruptcy last year as it struggled with heavy debt and growing competition for budget-conscious travelers. The airline also faces challenges after a proposed merger with JetBlue was blocked by a federal judge.
But Christie said Wednesday that the bankruptcy process is progressing as planned, and the airline expects to emerge from Chapter 11 this quarter.
In addition to the latest layoffs affecting multiple departments, Spirit has already furloughed pilots and offered extended voluntary leave for flight attendants. While Christie noted that the airline has met its cost-saving target, he emphasized that Spirit continues to explore additional opportunities to cut costs and increase revenue.
The airline had nearly 13,000 employees late last year, including about 2,000 non-union workers, according to court filings related to its bankruptcy case.
Spirit Airlines is the largest US passenger carrier to file for bankruptcy in more than a decade, marking a dramatic shift for an airline that once transformed the industry by making air travel the cheaper.
Known for its à la carte pricing strategy, Spirit charges extra for services like water and printed boarding passes. While this approach has drawn complaints from travelers, its low fares have made it one of the fastest growing airlines in the US.
However, Spirit has faced significant financial struggles, losing more than $2.2 billion since 2020 — nearly wiping out all the revenue it has built up since adopting the ultralow-cost model in 2006.