Home / Business and Economy / Spirit Airlines Staff Take Pay Cut to Avert Bankruptcy
Spirit Airlines Staff Take Pay Cut to Avert Bankruptcy
21 Dec
Summary
- Pilots will see an 8% hourly pay cut and reduced retirement contributions.
- Flight attendants' overtime rates will decrease but hourly pay remains unchanged.
- These cuts are projected to save Spirit Airlines $100 million annually.
Spirit Airlines' pilots and flight attendants have agreed to significant pay and benefit reductions in a crucial effort to steer the company away from bankruptcy. The Air Line Pilots Association and the Association of Flight Attendant-CWA unions negotiated these concessions last month, which include an eight percent cut to pilots' hourly wages and a reduction in retirement contributions from 16% to eight percent.
While flight attendants will not experience a reduction in their base hourly pay, their overtime rates will decrease from 150% to 100%. These agreements, if approved by the court, are set to take effect on January 1, 2026, and are expected to generate substantial savings for Spirit, totaling $85 million from pilots and $15 million from flight attendants annually.
Spirit Airlines, which filed for Chapter 11 restructuring in late August, has incurred substantial losses, estimated at $804 million this year, with a projected deficit of $145 million. The airline anticipates potential profitability by 2027, following these internal cost-saving measures and schedule optimization efforts.
