Shares of Spirit Airlines Inc. rose about 3% in premarket trading on Thursday after the company reported a smaller-than-expected loss for the fourth quarter. The airline announced a net loss of $183.7 million, or $1.68 per share, compared to a loss of $270.7 million, or $2.49 per share, in the same period last year. After adjustments, Spirit reported a loss of $1.36 per share, slightly better than the estimated loss of $1.42 per share. Despite a 5% decline in revenue to $1.3 billion, the result was in line with expectations.
Optimistic Booking Trends
Spirit Airlines expressed confidence in its ability to return to profitability, citing encouraging booking trends. The company’s CEO, Ted Christie, stated that the current booking trends indicate a rebound in domestic travel. He expects the first quarter to show an “unprecedented sequential improvement in total revenue per available seat mile” due to these positive booking trends and strategic changes made by the airline.
Financial Outlook
Spirit Airlines aims to reach cash flow positivity in the second quarter of 2024 and beyond. With $1.3 billion in liquidity as of the end of 2023, Chief Financial Officer Scott Haralson believes the company has more than enough resources to achieve this goal. However, the airline is also evaluating options to address its debt maturities in 2025 and 2026.
Focus on JetBlue Merger
Despite recent regulatory pushback against Spirit’s pending acquisition by JetBlue Airways Corp., the airline remains determined to proceed with the merger. Spirit plans to appeal a federal judge’s decision that blocked the deal. The stock has experienced a significant decline of 57% in the past month.
