Spirit Airlines jetliners on the tarmac at Fort Lauderdale Hollywood International Airport. (Joe Cavaretta/South Florida Sun Sentinel/Tribune News Service via Getty Images)
Joe Cavaretta | South Florida Sun-sentinel | Getty Images
Spirit Airlines on Friday raised its financial forecast for the fourth quarter of 2023 and said it’s trying to refinance its debt, sending its shares soaring greater than 17%. A rout earlier this week followed a judge’s ruling on Tuesday that blocks JetBlue Airways from buying the budget carrier.
Spirit said in a filing that it expects revenue to are available at about $1.3 billion, on the high end of its earlier forecast, due to strong bookings on the close of the 12 months. It estimated adjusted negative margins of 12% to 13%, an improvement from a previous forecast for as much as a 19% negative margin for the last three months of the 12 months.
The airline also credited lower fuel costs and other expenses for its improved estimates.
Friday’s gains weren’t enough to erase Spirit stock’s losses this week. Shares shed 55% through Friday’s close and lost greater than $873 million in market capitalization because the ruling raised questions on the airline’s future while it was on already shaky footing. Some analysts said the carrier may very well be on the right track to file for bankruptcy protection, if not liquidate altogether.
The 2 airlines said they disagreed with the choice and were assessing next steps, which could include an appeal.
Spirit confirmed Friday that it’s weighing options to refinance greater than $1 billion in debt that matures in 2025. It previously sold and leased back a few of its aircraft. The airline said within the filing that it had $1.3 billion of liquidity at the tip of 2023.
The carrier had been struggling even before the antitrust ruling and had last 12 months warned about challenges including higher costs, weaker travel demand and a Pratt & Whitney engine problem that will ground dozens of its Airbus planes this 12 months.
Spirit said Friday it expects compensation from Pratt & Whitney, a unit of RTX, in reference to that engine issue.
“Discussions with Pratt have progressed considerably since October, and while no agreement has been reached thus far, the Company believes the quantity of compensation it’ll receive will likely be a major source of liquidity over the subsequent couple of years,” Spirit said Friday in is securities filing.
Spirit plans to carry a quarterly call with analysts on Feb. 8 to debate results and its outlook.
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