A Spirit Airlines plane awaits takeoff at LaGuardia Airport in Recent York
Leslie Josephs/CNBC
Spirit Airlines‘ fourth-quarter loss narrowed to just about $184 million, but its CEO said the carrier is on a path back to profitability and that the domestic air travel market is improving.
The carrier is trying to seek out its footing after domestic fares fell, a Pratt & Whitney engine issue grounded a few of its Airbus its planes and a judge blocked JetBlue Airways‘ planned acquisition of the carrier earlier this yr. The 2 carriers are appealing that call.
The failed merger has helped drive Spirit’s stock down greater than 57% thus far this yr as investors fretted about Spirit’s financial future. The carrier’s looming debt payments ahead have prompted some calls that the airline could must restructure, and even liquidate.
On Thursday, Spirit reiterated that it “is aware of its 2025 and 2026 debt maturities and is assessing options to deal with those maturities when the time is acceptable.”
The budget airline has spent months on the lookout for ways to chop costs, including adjusting its network and shifting its aircraft delivery schedule.
“The Spirit team is 100% clear and focused on the adjustments we are currently deploying and will proceed to make throughout 2024 to drive us back to money flow generation and profitability,” CEO Ted Christie said in an earnings release.
Spirit still expects to lose money in the primary quarter, nonetheless, and said it expects revenue of between $1.25 billion and $1.28 billion, above analysts’ forecasts.
Here’s what Spirit reported within the fourth quarter in comparison with what Wall Street expected, based on average estimates compiled by LSEG, formerly often called Refinitiv:
- Adjusted loss per share: $1.36 vs. an expected $1.46
- Total revenue: $1.32 billion vs. an expected $1.32 billion
Spirit’s net lack of $183.65 million, or $1.68 per share, is improvement from a net lack of $270.66 million, or $2.49 per share, throughout the year-ago quarter. Adjusting for one-time items the carrier reported a net lack of $1.36 per share.
Revenue was down 5% to $1.32 billion.
The carrier plans for 2024 capability to be flat to up mid-single digits compared with last yr, and up 1.5% in the primary quarter, Spirit said.
Weaker domestic airfares have had an outsized affect on budget airlines, which largely deal with U.S. routes. Added capability has prompted them to discount flights, especially during off-peak periods.
Spirit said fare revenue per passenger fell 25% within the fourth quarter to $48.24, while non-ticket revenue per passenger, which incorporates Spirit’s myriad fees like seat assignments and carry-on bags, fell 6.6% to $66.60. Passenger flight segments were up 12% within the fourth quarter from the identical period of 2022.
Spirit said it expects to have a median of 25 Airbus aircraft grounded this yr due to Pratt & Whitney engine issues.
Those disruptions are expected to peak at 40 aircraft grounded in December. Spirit said expects to have 215 airplanes in its fleet by the top of the yr.
The Miramar, Florida-based airline again said that talks for compensation with Pratt & Whitney, a unit of RTX, have progressed and that “while no agreement has been reached up to now, the Company believes the amount of compensation it will receive will be a significant source of liquidity over the following couple of years.”
