Spirit Airlines cuts August schedule, eyes possible furloughs as recovery stalls
Discounter Spirit Airlines is not immune from the surging coronavirus that has stalled the recovery in air travel among U.S. carriers.
The South Florida-based carrier will operate an average of 380 daily flights in August, Spirit CEO Ted Christie told staff in a July 15 internal memo viewed by TPG. This is down from previous plans that Cirium schedule data shows was around an average of 403 flights a day.
"The leisure market we serve has been more resilient than the international and business markets [but] the changing headlines have impacted demand," he said. "It will be up to our leadership team to continue to assess the future operations, staffing and size of the airline."
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Spirit is the just the latest in a growing queue of airlines to say the recovery has stalled. On July 14, Delta Air Lines CEO Ed Bastian called the return of travelers "choppy" and said the airline would likely hold its schedule relatively steady through the end of the year.
Allegiant Air, Southwest Airlines and United Airlines have also acknowledged weaker demand citing the rise in COVID-19 infections in the South and West, as well as domestic travel restrictions.
Data from trade organization Airlines for America (A4A) shows net bookings — new reservations minus cancellations — falling slightly for U.S. domestic flights at the end of June and then holding steady at around 20% of 2019 levels during the first week of July.
Related: State-by-state guide to coronavirus reopening
Under its previous August schedule, Spirit planned to fly roughly 64% of what it flew in August 2019, according to Cirium. This does not include the reductions unveiled to staff.
"If demand doesn’t recover, we may need to right-size our operation for a smaller overall market which could lead to workforce reductions," Christie told staff in a warning of possible involuntary furloughs or layoffs to come. "We’re working hard to exhaust all other options before we get to that point."
Every U.S. carrier is weighing the size of their workforce this fall. Once employment protections under the federal coronavirus aid package, or CARES Act, expire at the end of September, Wall Street analysts expect something of a "terrible Thursday" on Oct. 1. Cowen analyst Helane Becker forecasts more than 120,000 airline industry staff could lose their jobs as a result of the crisis.
Related: Delta says air travel recovery has stalled, hopes more flyers return by end of summer
American Airlines has sent notices of possible furloughs to roughly 25,000 staff and United notices to around 36,000 staff. Even Southwest, which has never involuntarily furloughed staff in its nearly 50-year history, has told staff it may forced to do so.
On Thursday, Bastian told Delta employees that the carrier was still "overstaffed in some areas of the business" despite 17,000 people taking voluntary departure packages. The airline had already warned more than 2,500 pilots with additional notices pending an evaluation of alternative options.
In Spirit memo, Christie emphasized that more cost cuts are needed at the already ultra low-cost Spirit to survive the pandemic.
Related: Spirit geared to 'win the recovery,' eyes return to growth
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.