Spirit Airlines Warns About Plans Amid Tariffs

Spirit Airlines has been in the middle of a brand overhaul in recent months and years as it looks to shed its budget airline reputation and compete with some of the other major airlines throughout the United States. However, a recent issue has the airline issuing a warning about its future plans.

As Kyle Stewart of Live and Let Fly pointed out in an article last month, Spirit Airlines should no longer be dismissed as just a budget airline.

"Spirit recently overhauled its Free Spirit loyalty program, and—brace yourselves—it’s good. Not 'good for Spirit,' but actually competitive with mainline carriers," Steward wrote for Live and Let Fly this week. "Elite members can now enjoy perks like free checked bags, seat selection (yes, even Big Front Seats), and priority boarding. And unlike American’s loyalty points or Delta’s SkyMiles circus, Free Spirit Status levels that award these perks are available at lower thresholds than any of the major carriers.

"Spirit also offers more nonstop flights from secondary cities than the other carriers," he continued. "For airports like my home airport in Pittsburgh, it’s often the only nonstop option or is more competitive in markets like New York (though it’s since discontinued flights between Pittsburgh and the New York market)."

But as Spirit tries to shed that label, the airline has been hit with a pretty significant issue that could hinder its growth and transformation.

Back in April, the Donald Trump presidential administration enacted a 20 percent tariff on all imports from the European Union. That tariff was quickly suspended, moving instead to a 10 percent rate, though that suspension expires in early July and could move back to 20 percent at that point.

Regardless, that could pose an issue for Spirit, which is set to receive 92 Airbus A320-family aircraft through 2031, imported from Europe and subject to those tariffs.

While Spirit needs these planes in order to achieve its rebrand, the airline issued a pretty clear warning earlier this week, making it clear that they could be forced to postpone or cancel deliveries of the Airbus aircraft. Or, they may choose to order fewer aircraft than initially intended.

"The imposition of tariffs will increase the cost of imported new Airbus aircraft and parts, which in turn could have a material adverse effect on our business, financial condition and/or results of operations. We may seek to postpone or cancel delivery of aircraft currently scheduled for delivery, and may choose not to purchase as many aircraft as we intended in the future," Spirit said in a statement.

Clearly, this is a concerning situation for the airliner as it attempts to shift its identity.