Spirit Airlines Secures New Agreement For GTF Compensation

Spirit Airlines has reached a compensation agreement for aircraft grounded due to geared turbofan (GTF) engine issues.

Under the terms, Spirit will receive a monthly credit through the end of 2025 for each related aircraft on the ground (AOG). It values the agreement between an estimated $150 million and $195 million, with the final amount dependent on the number of days its affected aircraft are out of operation. The ULCC had a separate agreement for GTF compensation in 2024, one it valued at $150-$200 million. Its latest was reached on June 4 with International Aero Engines, an affiliate of Pratt & Whitney, and disclosed in a June 9 filing.

At the time of its last earnings call in August 2024, prior to filing for bankruptcy protection, Spirit was expecting to start 2025 with around 35 AOGs, projecting that to escalate to nearly 70 by year’s end. Without updating those figures, the ULCC in late May estimated the engines would require removal and inspection “through at least 2026.” It was among the factors Spirit cited when reporting its first quarter 2025 results, warning of continued challenges and uncertainties ahead.

“In addition to the effects of the Pratt & Whitney GTF engine issues on our operational reliability, we have experienced an overall increase in volatility in seasonality as well as a decrease in unit revenue and persistently higher fuel prices over the last few years, which have negatively affected revenue and costs,” the ULCC cautioned on May 30. “Should these trends continue into the future, our operating results may be negatively impacted.”

The South Florida-based carrier emerged from a Chapter 11 restructuring process in March with less debt, and a $350 million equity investment from its investors. For AOG days last year, “Pratt & Whitney agreed to issue us $150.6 million in credits ... of which the entire amount was recognized in 2024,” Spirit noted in an annual report.

Spirit currently operates an in-service fleet of 157 aircraft, according to the Aviation Week Network Fleet Discovery database: 70 Airbus A320ceo family and 87 A320neo family. Additionally, two aircraft are parked and 56 are stored, Fleet Discovery shows, including 36 PW1000G-powered A320neos. As of March 31, 2025, the airline had 92 A320 family aircraft scheduled for delivery through 2031, expecting four in the remainder of the year.

In recent weeks, competitor JetBlue Airways has described GTF improvements, with its own AOGs currently in the “single high digits” versus prior expectations of being in the mid-to-high teens.