Spirit Airlines is selling planes worth $500 million and cutting staff as it fights to stay in the air

• On Thursday, Spirit Airlines unveiled plans to cut costs and raise cash amid bankruptcy reports.
• Its stock rose after it said it would sell $519 million of Airbus jets and cut staff.

Spirit Airlines' woes are growing more apparent as it works to raise cash by selling planes and cutting staff.

The major budget airline has struggled since its merger with JetBlue was called off in March. In January, a federal judge blocked the deal over anti-competition concerns.

Earlier this month, The Wall Street Journal reported Spirit was considering filing for Chapter 11 bankruptcy. Its stock has fallen 85% since the start of the year.

However, the market has reacted positively to cost-cutting measures announced this week, as well as reports of fresh talks with rival ultra-low-cost carrier Frontier over a possible merger.

In a Thursday regulatory filing, Spirit said that it had agreed to sell 23 Airbus planes to GAT Telesis — a firm that specializes in aircraft maintenance, leasing, and selling parts.

The airline said it expects the deal to be worth $519 million.

The sale is set to further reduce Spirit's capacity, which it said it expects to be down "mid-teens" next year. The airline added in the filing that a reduced availability of Pratt & Whitney engines also contributes to that expected decline.

By contrast, mainline carriers like United, Delta, and American said in third-quarter earnings reports that they expect increased passenger demand with profits bolstered by premium cabins.

Budget airlines have tried to latch onto this increased demand for premium options. In July, Spirit announced new ticket bundles to appeal to higher-paying customers.

Spirit also said Thursday it plans to implement $80 million of cost reductions early next year — primarily by cutting staff given the expected fall in flight volume.

The airline's stock rose around 12% in pre-market trading Friday, suggesting Spirit may have found a route to avoid bankruptcy.

Spirit did not immediately respond to a request for comment from Business Insider, sent outside regular US working hours.