Spirit AirlinesThe CEO said on Thursday that the domestic market was improving and defended the budget airline’s ability to generate cash even without a takeover by JetBlue Airwayswhich a federal judge blocked earlier this year.
However, Spirit expects to lose money in the first quarter and said it expects revenue of between $1.25 billion and $1.28 billion, above analysts’ forecasts. He estimated it would be cash-flow positive in the second quarter of the year “and beyond.”
The budget airline is trying to find its footing after domestic fares fell last year, a Pratt & Whitney An engine problem grounded dozens of Airbus planes and the JetBlue deal failed in court. The two airlines are appealing the decision, although analysts were pessimistic about the chances of the ruling being overturned.
The failed merger has contributed to Spirit’s stock slumping more than 55% so far this year as investors worried about its financial future. Spirit’s impending debt payments have prompted some calls that the airline could have to restructure or even liquidate.
“This false narrative has been promoted by a variety of experts,” Spirit Chief Executive Officer Ted Christie said on an earnings call Thursday. “Liquidity is always king, and we have improved our levels to give us the flexibility we need to successfully close with JetBlue or pursue our standalone plans.”
Spirit closed 2023 with $1.3 billion in cash.
On Thursday, Spirit reiterated that it is evaluating options for maturing the 2025 and 2026 debt.
The budget airline has spent months looking for ways to cut costs, including adjusting its network and changing its aircraft delivery schedule.
“The Spirit team is 100% clear and focused on the adjustments we are making now and will continue to make throughout 2024 to get us back to cash flow and profitability,” Christie said in a statement. profits.
Christie and other Spirit executives said they were encouraged by strong bookings at the end of last year and the upcoming spring break season.
See what Spirit had to say about it quarter quarter compared to what Wall Street expected, based on average estimates compiled by LSEG, formerly Refinitiv:
- Adjusted loss per share: $1.36 vs $1.46 expected
- Total revenue: $1.32 billion vs. $1.32 billion expected
Spirit’s net loss of $183.65 million, or $1.68 per share, is an improvement from a net loss of $270.66 million, or $2.49 per share, in the year-ago quarter. Adjusting for one-time items, the carrier reported a net loss of $1.36 per share.
Revenue fell 5% to $1.32 billion.
The carrier plans for 2024 capacity to be flat to mid-single digits compared to last year and up 1.5% in the first quarter, Spirit said.
Weaker domestic fares have had a big impact on budget airlines, which are heavily focused on US routes. The added capacity prompted them to discount flights, especially during off-peak periods. Spirit, Frontier Airlines, Southwest Airlines and Alaska Airlines have scaled back plans to increase capacity after fare cuts.
Spirit said fare revenue per passenger fell 25 percent in the fourth quarter to $48.24, while non-ticket revenue per passenger, which includes Spirit’s myriad fees such as seat assignments and carry-on bags, fell 6, 6% to $66.60. Passenger flight segments grew 12% in the fourth quarter compared to the same period in 2022.
Spirit said it expects to ground an average of 25 Airbus planes this year due to Pratt & Whitney engine problems.
These outages are expected to culminate in 40 aircraft grounded in December. Spirit said it expects to have 215 planes in its fleet by the end of the year.
The Miramar, Florida-based airline again said it was in compensation talks with Pratt & Whitney, a unit RTXhave proceeded and that “although no agreement has been reached to date, the Company believes that the amount of compensation it will receive will be a significant source of liquidity over the next two years.”
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