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, sending shares soaring greater than 20% after a rout earlier this week that followed a judge’s ruling that blocks JetBlue Airways from buying the budget carrier.
Spirit said in a filing that it expects revenue to are available in at about $1.3 billion, on the high end of its earlier forecast, because of strong bookings at the tip of the yr. It estimated adjusted negative margins of 12% to 13%, improvement from a previous forecast for as much as a 19% negative margin for the last three months of the yr.
The airline also credited lower fuel costs and other expenses in its improved estimates.
Prior to Friday’s premarket surge, Spirit shares had shed 62% and lost than $1 billion in market capitalization over the past trading week because the ruling raised questions on the airline’s future. Some analysts said the carrier could possibly be heading in the right direction to file for bankruptcy protection.
The 2 airlines said they disagreed with the choice and were assessing next steps, which could include an appeal.
Spirit confirmed on 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 yr warned about challenges including higher costs, weaker travel demand and a Pratt & Whitney engine problem that may ground dozens of its Airbus planes this yr.
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 up to now, the Company believes the quantity of compensation it’ll receive will likely be a big source of liquidity over the following 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.
