Spirit Airlines’ pilots and flight attendants have ratified revised two-year employment contracts with the company, agreeing to concessions the carrier estimates will save it $100 million annually and ensure its post-bankruptcy viability.
Leaders at both unions – the Air Line Pilots Association, International (ALPA) and the Association of Flight Attendants (AFA) – have thrown support behind the agreements.
The labour concessions come as Spirit Airlines’ parent Spirit Aviation, operating under bankruptcy court supervision for the second time in one year, seeks to navigate a path from bankruptcy restructuring to emerging as a company capable of making money. Its ability to succeed in that regard remains uncertain, with the loss-making carrier having warned investors about its viability as a going concern.
New labour deals go a long way toward restoring Spirit’s health.
Now, Miramar, Florida-based Spirit Aviation needs judge Sean Lane with US Bankruptcy Court for the Southern District of New York to approve the two new labour deals. The company on 11 December filed a court papers requesting the judge’s sign off.
“These new [agreements] will provide stability and predictability for [Spirit], as well as cost savings, which will assist the [airline] in competing in a challenging marketplace,” Spirit says in a court filing.
The two revised agreements are to take effect on 1 January. ALPA represents some 3,100 Spirit pilots and the AFA’s represents 5,300 attendants.
Spirit estimates its new ALPA deal will shave $85 million off its annually expenses thanks to provisions including an 8% cut to pilots’ hourly pay and reduced contributions to their retirement accounts.
The deal calls for the airline to begin restoring wages and retirement payments to prior levels starting in August 2028. That is after the new agreement expires, but Spirit and the union expect they will continue working under the terms of the new deal for as long as two years after it expires, as they negotiate their next contract.
Spirit says its revised flight-attendant contract will save it $15 million annually, the result of reduced overtime and holiday pay, elimination of pay during ground holds and revised provisions related to scheduling.
Both work groups on 11 December ratified their deals.
“This vote represents Spirit pilots’ direct investment in the airline’s future… Spirit pilots made a difficult choice that provides the company with what it needs from labour to secure financing and complete its restructuring,” says Ryan Muller, chair of the ALPA council representing Spirit pilots.
