- Spirit Airlines posted another loss at the end of last year.
- CEO Ted Christie said the domestic air travel market is improving.
- The budget airline and JetBlue are appealing a judge’s ruling that blocked their planned merger.
Spirit Airlines‘ fourth-quarter loss narrowed to nearly $184 million, but its CEO said that the carrier is on a path back to profitability and that the domestic air travel market is improving.
The airline is trying to find its footing after domestic fares fell, a Pratt & Whitney engine issue grounded some of its Airbus planes and a judge blocked JetBlue Airways‘ planned acquisition of the carrier earlier this year. The two airlines are appealing that decision.
The failed merger has helped drive Spirit’s stock down more than 57% so far this year as investors fretted about its financial future. Spirit’s looming debt payments ahead have prompted some calls that the airline could have to restructure, or even liquidate.
On Thursday, Spirit reiterated that it “is aware of its 2025 and 2026 debt maturities and is assessing options to address those maturities when the time is appropriate.”
The budget airline has spent months looking for ways to cut 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 continue to make throughout 2024 to drive us back to cash flow generation and profitability,” CEO Ted Christie said in an earnings release.
Spirit still expects to lose money in the first quarter, however, and said it projects revenue of between $1.25 billion and $1.28 billion, above analysts’ forecasts.
Here’s what Spirit reported for the fourth quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as 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 loss of $183.65 million, or $1.68 per share, is improvement from a net loss of $270.66 million, or $2.49 per share, during the year-ago quarter. Adjusting for one-time items the carrier reported a net loss of $1.36 per share.
Revenue was down 5% to $1.32 billion.
The carrier plans for 2024 capacity to be flat to up mid single digits compared with last year, and up 1.5% in the first quarter, Spirit said.
Weaker domestic airfares have had an outsized affect on budget airlines, which largely focus on U.S. routes. Added capacity has prompted them to discount flights, especially during off-peak periods.
Spirit said fare revenue per passenger fell 25% in the fourth quarter to $48.24, while nonticket revenue per passenger, which includes Spirit’s myriad fees like seat assignments and carry-on bags, dropped 6.6% to $66.60. Passenger flight segments were up 12% in the fourth quarter from the same period of 2022.
Spirit said it expects to have an average of 25 Airbus aircraft grounded this year because of the 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 end of the year.
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 to date, the Company believes the amount of compensation it will receive will be a significant source of liquidity over the next couple of years.”
Don’t miss these stories from CNBC PRO:
Source: Business - cnbc.com
