Spirit Airlines warns of more pain from grounded jets, excess capacity

Spirit Airlines on Monday forecast a loss in the second quarter as its earnings continue to reel from the grounding of a number of its aircraft as well as bloated industry capacity in key markets. Its shares were down 11.4% in afternoon trade. The ultra-low-cost carrier has been losing money despite booming travel demand, raising questions about its ability to manage debt that is due to mature in 2025 and 2026. The company said it has had "constructive" discussions with its bond holders and is aiming to have a resolution this summer. Spirit is among the carriers hardest hit by a snag with RTX's Pratt & Whitney Geared Turbofan (GTF) engines, which is expected to ground 40 of its aircraft this year. In 2025, the situation is projected to get worse as the airline estimates to have about 70 jets out of service. It is not only hurting its growth plans, but also leaving the airline overstaffed and driving up operating costs. While Pratt & Whitney has agreed to compensate the airline, Spirit Chief Financial Officer Scott Haralson said the issue is still hurting the company's earnings. "The impact on our business associated with these Pratt engine issues cannot be understated," Haralson said on an earnings call. Spirit has announced plans to furlough up to 260 pilots in September and to roll out more measures to cut its costs by $100m this year. Last month, it reached a deal with planemaker Airbus to postpone all aircraft deliveries scheduled from the second quarter of 2025 through 2026.<br/>