The collapse of the merger has caused Spirit’s stock to drop more than 57% this year, leading to concerns about the airline’s financial stability. The company’s upcoming debt payments have raised questions about potential restructuring or even liquidation. However, Spirit stated on Thursday that it is evaluating options to address its 2025 and 2026 debt maturities at the appropriate time. The budget airline has been working to lower expenses by adjusting its network and altering its aircraft delivery schedule. CEO Ted Christie emphasized the company’s focus on implementing adjustments in 2024 to steer it back to generating cash flow and turning a profit, despite expecting continued losses in the first quarter. Spirit anticipates revenue of $1.25 billion to $1.28 billion, exceeding analysts’ projections.Here’s how Spirit’s fourth-quarter performance compares to Wall Street’s expectations, based on average estimates from LSEG, previously known as Refinitiv:Adjusted loss per share: $1.36 vs. the anticipated $1.46Total revenue: $1.32 billion vs. an expected $1.32 billionSpirit reported a net loss of $183.65 million, or $1.68 per share, an improvement from the $270.66 million loss, or $2.49 per share, in the same period the previous year. Excluding one-time items, the carrier reported a net loss of $1.36 per share. Revenue decreased by 5% to $1.32 billion.Spirit anticipates a flat to mid-single-digit increase in capacity for 2024 compared to the previous year, with a 1.5% rise expected in the first quarter. Budget airlines have been significantly impacted by lower domestic airfares, leading to discounted flights, particularly during off-peak periods. In the fourth quarter, Spirit experienced a 25% decrease in fare revenue per passenger, amounting to $48.24, while non-ticket revenue per passenger, which includes various fees, such as seat assignments and carry-on bags, dropped by 6.6% to $66.60. The airline observed a 12% uptick in passenger flight segments in the fourth quarter compared to the same period in 2022.Spirit anticipates that around 25 of its Airbus aircraft will be grounded this year due to Pratt & Whitney engine issues, with the number expected to peak at 40 grounded aircraft in December. The company projects a fleet size of 215 airplanes by the end of the year. Spirit reported progress in compensation discussions with Pratt & Whitney, a division of RTX, although no agreement has been reached yet. The airline anticipates that the compensation it will receive could provide significant liquidity over the next couple of years.
