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Spirit Aviation Holdings, Inc. (NYSE American:FLYY) has entered into a material definitive agreement with International Aero Engines, LLC (IAE), an affiliate of Pratt & Whitney, to address ongoing issues with its fleet of GTF engines. As disclosed in an 8-K filing with the Securities and Exchange Commission, the agreement was made on June 4, 2025, and aims to provide financial compensation for Spirit’s aircraft that are grounded due to engine issues.
The agreement follows a notice from Pratt & Whitney in July 2023, which highlighted a rare condition in the powdered metal used in manufacturing certain engine parts. This condition necessitated accelerated inspections of the PW1100G-JM geared turbo fan engines that power Spirit’s A320neo aircraft. As a result, Spirit has grounded some of its aircraft for necessary inspections.
Under the terms of the agreement, IAE will provide Spirit with a monthly credit through the end of 2025. This compensation is contingent on specific conditions and is intended to mitigate the financial impact of the unavailability of Spirit’s aircraft due to the engine issues. The estimated impact on Spirit’s liquidity is projected to be between $150 million and $195 million. This estimate is based on the number of days in 2025 that Spirit’s aircraft are or were unavailable for operational service starting January 1, 2025.
Additionally, Spirit has agreed to release IAE and its affiliates from any claims related to the affected engines that have accrued or may accrue from March 26, 2024, through December 31, 2025.
The information provided in this report is based on a press release statement included in the company’s SEC filing.
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