came out fighting Friday as it looked to reassure investors with improved guidance and steps it has taken to shore up liquidity.
The company also said it was assessing options to refinance 2025 debt maturities, which credit ratings agency Fitch described as a “significant refinancing risk” earlier this week.
Shares of
the ultra-low-cost carrier, have plunged 62% in the three trading days since a federal judge blocked its proposed $3.8 billion merger with
The shares jumped 20% to $6.82 in premarket trading Friday, but remain far below the $15 level it was trading at last week.
Spirit’s investor update contained a flurry of information, all of which paints the airline’s prospects in a slightly more positive light than the gloom of recent days.
The airline said its fourth-quarter revenue is expected to be at the high end of its previous guidance of $1.28 billion to $1.32 billio due to strong bookings in the peak period over the Christmas and New Year’s Day holiday. Operating margin guidance was also revised upward to between minus 12% to minus 13%, from a negative 15%-19% range.
Advertisement – Scroll to Continue
Costs are also set to be better than expected due to lower fuel costs, lower airport costs and operational reliability.
Spirit also reiterated some of its recent efforts to shore up liquidity, noting that it received $419 million from sale-leaseback transactions of 25 jets in December and January. It also expects to receive compensation from Pratt & Whitney over engine availability issues, which will be a “significant source of liquidity over the next couple of years.”
The airline said it had $1.3 billion of liquidity as of Dec. 31, 2023.
Advertisement – Scroll to Continue
Fitch Ratings said Wednesday that Spirit needs to “clearly articulate a near-term plan to preserve and generate liquidity, address its refinancing risk, and improve profitability to avoid a negative rating action.”
The update Friday looks to be an attempt at doing all three of those things.
The filing also reiterated that Spirit disagrees with the court’s ruling and continues to review the decision to block the merger and evaluate its next steps. That could lead to an appeal, although JetBlue may be unconvinced given Spirit’s struggles since the merger was agreed to back in July 2022.
Advertisement – Scroll to Continue
Spirit is trying to convince JetBlue to appeal the decision, Reuters reported Friday, citing people familiar with the discussions.
The Wall Street Journal reported Thursday that Spirit was planning to explore restructuring options following the blocked deal. A spokesperson for the company told Barron’s that Spirit “is not pursuing nor involved in a statutory restructuring.”
The broader sector enjoyed more modest gains, as
JetBlue
,
and
were all up around 0.5% ahead of the open of trading.
The storm clouds are still gathering over
but, for the moment at least, the skies are looking slightly brighter.
Write to Callum Keown at callum.keown@barrons.com
