2024-01-19 21:25:00
SPIRIT AIRLINES +23.16% Close: 0 Open: 7.17 High: 7.35 Low: 6.6 Turnover:– Page Quote News Graphs Company Profile Recommendations More articles on the subject: Going to war and trying to reassure investors with an improved forecast and steps it took to improve liquidity . The company announced that it is looking at options for recycling the $1.1 billion debt that it is supposed to pay in 2025.
In the three trading days until Thursday, the low-cost company’s shares fell 62% after a federal judge blocked the $3.8 billion merger deal with JetBlue Airways Corp. -1.19% Close:0 Open:5.07 High:5.08 Low: 4.72 Circulation:– Page Quote News Graphs Company Profile Recommendations Additional articles on the subject: . In response to the company’s announcements, its shares jumped 22% to a price of $6.95, but remained well below the $15 level at which it traded last week. According to Dow Jones, the company’s stock is on pace for its biggest daily percentage gain since March 25, 2020.
The update that the company published to investors contained a lot of information that put Spirit in a slightly more positive light than the negativity of the last few days. The airline said its fourth-quarter revenue is expected to be at the upper end of its previous forecast of between $1.28 billion and $1.32 billion, due to strong bookings over Christmas and New Year. The operating profit forecast has also been revised upwards from minus 12% to minus 13% compared to a negative range of 15%-19%. In addition to all this, costs are also expected to be better than expected due to lower fuel costs, lower airport costs and operational reliability.
Spirit also reiterated its recent efforts to strengthen liquidity and noted that it received $419 million from sale-leaseback transactions of 25 aircraft in December and January. The company also expects to receive compensation from Pratt & Whitney following the problems with the engines, which is expected to be a “significant source of liquidity in the coming years.” The company said it had $1.3 billion in liquidity as of December 31, 2023.
The low-cost company also reiterated that it disagrees with the court’s ruling and continues to review the decision to block the merger while considering its next steps. This announcement by the company could lead to an appeal of the ruling, although JetBlue is unlikely to be enthusiastic about the matter given the many challenges Spirit has faced since the merger agreement in 2022. According to Reuters, Spirit is working to convince JetBlue to appeal the decision.
There are still serious concerns about Spirit’s future, as analysts believe that the company faces two options: reorganization or bankruptcy. However, at least for now, the sky seems to be a little brighter.
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