Spirit Airlines to Furlough and Demote Pilots. The Stock Is Falling.

A Spirit Airlines aircraft prepares to depart from the Austin-Bergstrom International Airport on Nov. 13, 2024 in Austin, Texas (Brandon Bell/Getty Images)

Discount air carrier Spirit Airlines said Monday that it is putting hundreds of pilots on unpaid leave starting in November. Shares of its parent company, Spirit Aviation Holdings , closed down 2.4% to $4.48 on the news.

“We are taking necessary steps to ensure we operate as efficiently as possible as part of our efforts to return to profitability,” the company said in a statement.

Spirit’s airlines pilot union said that in addition to the 270 pilot furloughs, 140 others were being downgraded from captain to first officer. “Spirit continues to shrink, and with it, the value of pilot seniority and Spirit careers continue to erode,” said Captain Ryan Muller, chairman of the Spirit unit of the Air Line Pilots Association International.

After filing for bankruptcy protection in November and being delisted from the New York Stock Exchange, Spirit was able to restructure its debt in March and exit Chapter 11.

However, the carrier has continued to struggle, with shares in its holding company down nearly 50% since its relisting in late April. In contrast, Delta and United stock have risen on positive earnings reports earlier this month.

Write to Anita Hamilton at anita.hamilton@barrons.com