Spirit Airlines is reducing its workforce and selling some jets valued at millions of dollars as the budget carrier seeks to cut costs amid financial challenges and an uncertain outlook.

As reported by the Associated Press, in a regulatory filing on Thursday, Spirit announced it had identified approximately $80 million in cost-saving measures set to begin early next year, with the majority stemming from workforce reductions, according to the Florida-based airline.

Spirit did not specify a number for the layoffs or what positions would be impacted. A spokesperson for the company declined to comment further when reached by The Associated Press Friday.

The budget airline also announced it has agreed to sell 23 airplanes to GA Telesis, an aviation services firm, for approximately $519 million. The Airbus A320ceo and A321ceo models, built between 2014 and 2019, are slated for delivery starting this month and continuing through February, the report said.

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GA Telesis celebrated the acquisition on Friday, highlighting that it will significantly enhance its fleet portfolio. Spirit anticipates that the proceeds from the sale, along with the repayment of related debt, will improve its liquidity by $225 million through the end of 2025, AP reported.

The past few years have been challenging for Spirit Airlines. The carrier struggled to achieve profitability even as the COVID-19 pandemic subsided and travel began to rebound, primarily due to rising operational costs and heightened competition. Competing airlines have attracted some of Spirit’s budget-conscious customers by introducing their own low-cost, no-frills ticket options.

During this time, Spirit has faced significant financial losses, totaling over $2.5 billion since early 2020. Additionally, the airline is grappling with increasing debt, with upcoming payments exceeding $1 billion.

According to Thursday’s regulatory filing, Spirit estimates its fourth-quarter capacity to drop 20% from last year. The company expects capacity to fall by the midteens for 2025, which accounts for this month’s sale and the prior removal of some other planes from scheduled service due to ongoing problems with the availability of Pratt & Whitney GTF engines.

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AP further reported that speculation about bankruptcy has surrounded Spirit Airlines, making it an appealing target for acquisition. While no merger has been finalized, JetBlue recently attempted to acquire Spirit but abandoned the deal after a federal judge blocked the acquisition due to antitrust concerns in January.

Frontier Airlines had also sought to merge with Spirit but was outbid by JetBlue at that time.

However, earlier this week, The Wall Street Journal reported that Frontier is in early discussions to explore a renewed bid, according to unnamed sources familiar with the situation.

Also Read: Boeing is reportedly in talks to buy Spirit AeroSystems, its key supplier on the troubled 737 Max

If a deal is reached, it may involve Spirit restructuring its debt and other liabilities during a bankruptcy process, according to The Journal. The report also mentioned that the airline is in ongoing discussions with bondholders regarding a potential bankruptcy filing. 

(With inputs from Associated Press)