April 8 (Reuters) - Spirit Airlines ( SAVE ) said on

Monday it has reached a deal with Airbus to delay all

aircraft deliveries scheduled from the second quarter of 2025

through 2026 and intends to furlough about 260 pilots, as the

U.S. carrier looks to save cash.

The ultra-low-cost airline has been facing questions about

its future after losing money in the past six quarters despite

booming travel demand.

Analysts and industry officials say the airline will

have to make drastic changes, including cutting flights and

exiting some markets to become profitable, which is still not

likely to happen this year.

The airline said it would defer the scheduled jet deliveries

to 2030-2031. As a result of the deferrals, along with quality

issues with engines made by supplier Pratt & Whitney, it plans

to furlough pilots effective Sept. 1.

Shares of Spirit were up about 5% in afternoon trade.

The agreement with Airbus would improve Spirit's

liquidity by about $340 million over the next two years, the

carrier said, adding that there were no changes to its orders

scheduled to be delivered during 2027-2029.

"(The) aircraft deferrals and pilot furloughs look positive,

in terms of helping the carrier to reduce (or) defer some costs.

However, among other factors, the carrier now potentially also

reduces its revenue generation opportunities," Citi Research

analyst Stephen Trent wrote in a note.

Spirit said it plans to issue an investor update by April

15.

The discount carrier operates an all-Airbus fleet. As of

December 2023, the company had a total of 205 Airbus jets.

Spirit now expects to end 2025 with a total of 219 jets in

its fleet, with no additions of the A320neo aircraft. It had

previously expected to add six A320neo jets in 2025 and increase

its fleet to 234 jets.

Analysts at Raymond James said the revised fleet plan would

reduce its capacity by 7% in 2025 and 16% in 2026.

Excess capacity in key markets is hurting Spirit's

pricing power, forcing the airline to discount heavily to fill

planes. Average fare per passenger was down 25% in the fourth

quarter from a year earlier.

A snag with Pratt & Whitney Geared Turbofan (GTF) engines

has already forced Spirit to ground some of its A320neo

aircraft. It has said the number of grounded jets would climb

steadily to an average of about 40 in December 2024.

Ryan Muller, head of Spirit's pilot union, said the airline

has more pilots than its operations require. The union is

exploring voluntary measures to reduce the need for furloughs

and downgrades, he said.

Spirit's flight attendants union told its members while

there was no plan to furlough cabin crew, the airline was

expected to offer them more extended voluntary time-off programs

this summer.

The airline will also close its crew base in Atlantic

City, New Jersey and offer reassignments to affected flight

attendants, the union said.