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- Spirit's Flight Plan Pivot
Good Morning!
Happy Tuesday! Hope you enjoyed the solar eclipse!
👉 Spirit has big news
👉 Biden announces new plan
👉Bullard makes prediction
SPIRIT: Delays and Layoffs
On Monday, Spirit Airlines announced plans to delay receiving new Airbus aircrafts and lay off about 260 pilots to save money. The company will push back the delivery of Airbus planes originally set for 2025 and 2026 to 2030 and 2031, except for a few leased planes and deliveries planned for 2027 to 2029. This move is expected to help Spirit save around $340 million over two years.
Source: Airways Magazine
Spirit aims to adjust its business in response to competitive changes. The airline is trying to improve its financial situation after facing challenges like the grounding of planes due to an engine recall. Spirit also said it would get payments for its grounded planes until the end of 2024, which could boost its cash by $150 to $200 million. Pilot layoffs will start in September, but flight attendants won't be affected. The airline is also closing its base in Atlantic City, New Jersey.
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BIDEN: New Student Loan Plan
President Joe Biden just announced a new student debt forgiveness plan which aims to overcome legal hurdles that stopped his first attempt. This time, the plan is more focused, aiming to help those in financial need. A notable part of the plan could help up to 25 million Americans by erasing excessive interest on student loans. High interest rates, sometimes over 8%, make it hard for many borrowers to pay down their debt. The Biden administration says more than 25 million people owe more on their federal student loans than they originally borrowed.
Source: VOX
Under the proposed plan, borrowers could see up to $20,000 of their unpaid interest forgiven, with no income restrictions. Those earning up to $120,000 individually, or $240,000 as a married couple, might get all their accumulated interest wiped out if they are in income-driven repayment plans, without needing to apply for this relief.
BULLARD: Three Cuts
James Bullard, former St. Louis Federal Reserve head, predicts the Fed will cut interest rates three times this year as inflation approaches their target and the economy remains solid. This outlook aligns with the Fed's stance but diverges from market predictions, which lean towards expecting only two cuts after a strong jobs report.
Source: CNBC
Despite his new academic role, Bullard's views continue to be influential. He noted the economy might achieve a "soft landing," slowing down just enough to control inflation without triggering a downturn.
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Source: CNBC
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