Chris Dane, president and managing partner of Hickory Global Partners, joins “Making Money with Charles Payne” to discuss airline stocks as summer travel heats up.
Spirit Airlines' stock price fell sharply on Friday after the Wall Street Journal reported that the ultra-low-cost airline was in talks with creditors and creditors about potentially filing for bankruptcy.
The company is also reportedly considering an “out-of-court deal” for restructuring. The Journal reported Thursday.
The potential bankruptcy filing comes after Spirit's $3.8 million merger with JetBlue Airways failed. JetBlue announced plans to merge with Spirit in 2022, but the airline scrapped the plan in March, citing regulatory challenges.
A JetBlue airliner overtakes a Spirit Airlines jet to land at Fort Lauderdale-Hollywood International Airport on April 25, 2022. (Joe Cavaletta/Sun Sentinel/Tribune News Service via Getty Images/Getty Images)
“After discussing options with our advisors and JetBlue, we believe that current regulatory hurdles do not allow us to complete this transaction in a timely manner in accordance with the merger agreement,” Spirit CEO Ted Christie said at the time. I have come to the conclusion that.”
A Spirit Airlines aircraft at Austin-Bergstrom International Airport on February 12, 2024 in Austin, Texas. (Brandon Bell/Getty Images/Getty Images)
FOX Business reached out to Spirit for comment and was directed to Christie's comments during the company's second-quarter earnings call.
JetBlue and Spirit agree to halt merger due to regulatory issues
“We are in productive dialogue with bondholders' advisors to address future debt maturities,” he said. “The dialogue is ongoing and we are happy to go into further detail or respond to questions on this topic. “I do not intend to speculate on the potential consequences.” In August. “Obviously that is our top priority and we are focused on securing the best outcome for the business as soon as possible, with a focus on improving performance, introducing new travel options and improving the guest experience. ”
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| keep | Spirit Airlines Co., Ltd. | 1.67 | -0.58 |
-25.62% |
Some bonds will mature next year, according to the Journal.
The airline's total debt reportedly amounts to $3.3 billion.
CLICK HERE TO GET FOX BUSINESS ON THE GO
A traveler checks in at the Spirit Airlines counter at Fort Lauderdale-Hollywood International Airport on October 24, 2023 in Fort Lauderdale, Florida. (Eva Marie Uzcategui/Bloomberg via Getty Images/Getty Images)
In late July, Spirit announced a number of “new services” aimed at providing “an even friendlier, more comfortable and cost-effective travel experience” and helping airlines transform.
Spirit Airlines improves satisfaction with new travel options offering Wi-Fi, snacks and checked baggage
A Spirit Airlines taxi rides at Los Angeles International Airport on April 4, 2024 in Los Angeles. (Brian van der Brug/Los Angeles Times via Getty Images/Getty Images)
The company also said in August that it is “on track” to achieve “$100 million in annual run-rate cost savings, with approximately $75 million expected to be achieved by the end of 2024” through various initiatives. . These include reducing discretionary capital expenditures, making network adjustments and furloughing some pilots.
The company's total operating revenue for the second quarter was $1.28 billion, down 10.6% year-over-year. Meanwhile, its net loss widened to $192.9 million.
