A Spirit Airlines plane waits to take off at New York's LaGuardia Airport
Leslie Josephs/CNBC
Spiritual airlinesThe fourth-quarter loss narrowed to nearly $184 million, but its chief executive said the airline is on track to return to profitability and the domestic air travel market is improving.
The airline is trying to find its footing after domestic fares fell, a Pratt and Whitney An engine problem grounded some of its Airbus planes and a judge blocked JetBlue Airways' Planned carrier acquisition early this year. The two airlines are appealing that decision.
The failed merger has contributed to Spirit's shares falling more than 57% so far this year, as investors worry about its financial future. Spirit's looming debt payments have sparked some calls that the airline may have to restructure or even liquidate.
On Thursday, Spirit reiterated that it “is aware of its debt maturities in 2025 and 2026 and is evaluating options to address those maturities when the time is right.”
The low-cost airline has spent months looking for ways to cut costs, including adjusting its network and changing its aircraft delivery schedule.
“The Spirit team is 100% clear and focused on the adjustments we are currently implementing and will continue to make throughout 2024 to return to cash flow and profitability,” CEO Ted Christie said in a statement. of results.
However, Spirit still expects to lose money in the first quarter 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 to what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:
- Adjusted loss per share: $1.36 vs. $1.46 expected
- Total income: $1.32 billion vs. $1.32 billion expected
Spirit's net loss of $183.65 million, or $1.68 per share, is an improvement from a net loss of $270.66 million, or $2.49 per share, during the quarter last year. Adjusting for one-time items, the company reported a net loss of $1.36 per share.
Revenue fell 5% to $1.32 billion.
The airline plans 2024 capacity to remain flat at mid-single digits compared to last year, and up 1.5% in the first quarter, Spirit said.
Weaker domestic airfares have had a huge effect on low-cost airlines, which focus heavily on U.S. routes. The extra capacity has led 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 non-ticket revenue per passenger, which includes Spirit's myriad fees such as seat assignments and carry-on bags, fell 6.6% to $66.60. Passenger flight segments increased 12% in the fourth quarter compared to the same period in 2022.
Spirit said it expects to have an average of 25 Airbus planes grounded this year due to problems with Pratt & Whitney engines..
Those disruptions are expected to peak at 40 grounded planes in December. Spirit said it expects to have 215 planes in its fleet by the end of the year.
The Miramar, Florida-based airline again said compensation talks with Pratt & Whitney, a unit of RTXhave made progress and that “while no agreement has been reached to date, the Company believes that the amount of compensation it will receive will be an important source of liquidity for years to come.”
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