Spirit Airlines executives maintain that the company has the financial resources necessary to succeed in the absence of a tie-up with JetBlue Airways.
“I want to comment on the recent speculation about Spirit’s ability to make it as a standalone carrier should the merger not close,” chief executive Ted Christie said during the company’s quarterly earnings call on 8 February.
“This misguided narrative has been advanced by an assortment of pundits,” he says. ”However, back in the real world, we are focused on facts. Liquidity is always king, and we have enhanced our levels to give us necessary flexibility to close with JetBlue or pursue standalone plans.”
Industry analysts described a relatively bleak future for Spirit after its proposed $3.8 billion deal with JetBlue was struck down on anti-competitive grounds, with TD Cowen aviation analyst and managing director Helane Becker warning that the ultra-low-cost carrier risked bankruptcy and liquidation.
Spirit reported holding $1.3 billion in cash and equivalents as of 31 December, which chief financial officer Scott Haralson says ”should be more than adequate to get us to our primary goal of getting the business to generate cash”. Company executives anticipate generating positive cash flow as soon as the second quarter.
The South Florida-headquartered ULCC lost $447 million on the full year of 2023, compared with a $554 million loss the previous year.
It reports a fourth-quarter loss of $184 million on $1.3 billion in revenue, compared with a $271 million loss on $1.4 billion of revenue during the prior-year period.
In December, the company sold and leased back 20 of its narrowbody Airbus jets, and in January it completed transactions for five more aircraft, generating a total of $419 million in cash. It is assessing options to refinance debt that will come due next year.
Spirit also expects “significant source of liquidity” in the form of a compensation package from Pratt & Whitney related to its recall of hundreds of geared turbofan (GTF) engines.
