Spirit Airlines will receive compensation related to the geared turbofan (GTF) engine issues through to the end of the year, the airline said in a SEC filing on June 9.
The agreement was signed with Pratt & Whitney affiliate International Aero Engines (IAE) on June 4 in which the company will receive a monthly credit through the end of 2025 as compensation for “each Spirit aircraft unavailable for operational service” as a result of the engine issues.
“The estimated impact of the agreement on Spirit's liquidity is currently expected to be between $150 million and $195 million, primarily determined by the number of days accumulated in 2025 (beginning January 1, 2025) on which Spirit aircraft are or were unavailable for operational service due to GTF engine issues,” Spirit read in its filing.
As part of the agreement, Spirit said it released IAE and its affiliates from claims related to impacted engines that “have accrued or may accrue” from March 26 2024 through to the end of last year.
Spirit Airlines operates a fleet of mostly A320neo family aircraft. The GTF engine issue was a result of powdered metal contamination. Spirit had first been notified in July 2023 that Pratt & Whitney needed to conduct an “accelerated inspection” of the engines. Spirit removed engines from service and grounded some of its A320neo aircraft for these inspections.
As of March 31, 2025, Spirit had a fleet of 213 A320 family aircraft.
Spirit Airlines' first quarter results improved, following its emergence from restructuring on March 12, 2025.
The company reported a net profit of $72.2 million from January 1 through March 12, 2025, and a net loss of $10.9 million from March 13 through March 31. This is compared to a net loss of $142.6 million in the full first quarter last year.
During the first quarter, the company took delivery of two aircraft under sale and leaseback transactions. Spirit said it secured financing for one aircraft scheduled for delivery from Airbus for this year, which will be finalised as a sale and leaseback transaction.
As of March 31, 2025, the company has 53 A320 family aircraft on order, including A320neo and A321neos.