Spirit Airlines unveils strategic plan amid bankruptcy filing

To address these issues, Spirit Airlines has launched 'Project Bravo,' a comprehensive transformation plan aimed at maintaining its cost advantage despite rising unit costs since 2019. "One of the pillars of ‘Project Bravo’ will be to maintain its cost advantage," stated Spirit Airlines.

The airline plans to enhance its liquidity through various measures, including sale-and-leaseback transactions and compensation agreements related to grounded aircraft. These efforts are expected to benefit the company by up to $1 billion by year-end.

A key aspect of 'Project Bravo' is improving the passenger experience through network enhancements and differentiated offerings for premium and elite customers. This includes introducing four new fare products and upgrading airport experiences with dedicated check-in lines and priority boarding.

Spirit Airlines also intends to implement six priorities within its network transformation plan: eliminating unproductive markets, aligning capacity with market dynamics, increasing less-than-daily flights on specific routes, maximizing out-and-back flying, operating flights during profitable periods while limiting off-peak capacity, and driving higher TRASM through codesharing and alliances.

In terms of financial projections, Spirit Airlines expects total revenue per ASM (TRASM) adjustments under 'Project Bravo' will positively impact revenues despite a shift away from ancillary fees. The company forecasts returning to profitability by 2025 following projected losses in 2024.

As part of its new business model targeting upmarket segments willing to pay higher fares, Spirit Airlines anticipates growing average per-passenger revenue from $122 in 2023 to $138 post-'Project Bravo.'

Despite current financial challenges resulting in an estimated net loss of $915 million by end-2024, Spirit Airlines projects swinging back into profit next year before experiencing another minor loss in 2026 but aims for significant profits thereafter.