Spirit Airlines announced an agreement with International Aero Engines (IAE) to receive monthly credits until the end of 2024 as compensation for being unable to utilize aircraft affected by engine issues.
The arrangement, detailed in a filing with the U.S. Securities and Exchange Commission, is expected to bolster liquidity by $150 million to $200 million. IAE, an affiliate of RTX Corp’s Pratt & Whitney, will provide these credits to offset the impact on Spirit’s operations.
Financial Impact and Future Plans
The extent of the agreement’s impact on Spirit’s liquidity hinges on the number of days in 2024 that its aircraft remain unavailable due to engine issues.
Spirit has agreed to release IAE and its affiliates from any claims related to the affected engines until December 31, 2024.
Looking ahead, the airline intends to negotiate arrangements with Pratt & Whitney regarding any remaining aircraft availability issues beyond this timeframe.
