Spirit Airlines says its liquidity 'should be more than adequate' for its cash-flow goal

By Emily Bary

Company highlights its 'primary goal of getting the business to generate cash'

Spirit Airlines Inc. on Thursday posted a slimmer loss than expected for the latest quarter, while calling out encouraging booking trends and expressing confidence in its ability to return to profitability.

Shares of Spirit (SAVE) have come under recent pressure after a judge blocked the company's pending acquisition by JetBlue Airways Corp. (JBLU), a decision Spirit is appealing. At the same time, the company used Thursday's earnings report to address the financial potential of the business as it stands.

See also: JetBlue still evaluating options of Spirit merger, stock drops after earnings

Chief Financial Officer Scott Haralson said the company's $1.3 billion in liquidity as of the end of 2023 "should be more than adequate to get us to our primary goal of getting the business to generate cash." He expects the company to be cash-flow positive in the second quarter of 2024 and beyond.

The airline "remains focused on consummating the merger with JetBlue" by appealing a federal judge's recent blocking of the deal, he added, but it is also looking into options to address its 2025 and 2026 debt maturities.

Shares were up about 3% in Thursday's premarket trading.

The company posted a fourth-quarter net loss of $183.7 million, or $1.68 a share, whereas it lost $270.7 million, or $2.49 a share, in the year-prior period. On an adjusted basis, Spirit lost $1.36 a share, while analysts tracked by FactSet were modeling a $1.42 adjusted loss per share.

The company generated $1.3 billion in revenue, down 5% from the $1.4 billion it recorded a year before but in line with the FactSet consensus. Total revenue per available seat mile was 8.94 cents, down about 17% from a year before, as the company saw roughly 15% more capacity.

Chief Executive Ted Christie said in a release that "current booking trends further our confidence that the domestic environment is beginning to rebound." He predicts "an unprecedented sequential improvement in total revenue per available seat mile" in the first quarter, reflective of the booking trends and strategic changes made by Spirit.

The stock is down 57% over the past month.

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-Emily Bary

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02-08-24 0855ET

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