Spirit Airlines Skyrockets: Bold Move to Sell Planes and Trim Workforce Ignites Investor Excitement
Spirit Airlines’ shares saw a significant surge of over 20% following an announcement to cut costs and generate cash amidst ongoing financial struggles. The airline plans to sell 23 older Airbus aircraft, aiming to raise $519 million, and implement cost reductions totaling approximately $80 million, largely through job cuts. This comes after another delay in refinancing over $1 billion in debt, now extended to late December. Despite these measures, Spirit has faced challenges returning to profitability post-pandemic, with shifting travel demands and aircraft groundings due to Pratt & Whitney engine issues.
Even with the recent stock rise, Spirit’s shares have dropped over 80% this year, exacerbated by a blocked acquisition attempt by JetBlue Airways. Although the airline did not specify the number of employees affected by job cuts, it noted a decrease in 2025 capacity by mid-teen percentages compared to this year. Meanwhile, talks of a merger with Frontier Airlines have been revived, previously stalled by JetBlue’s acquisition bid. Additionally, Spirit projected a slightly improved third-quarter negative operating margin of 24.5%, better than earlier estimates. This development has provided some optimism among investors, reflected in the stock price increase.
Original Story https://www.cnbc.com/2024/10/25/spirit-airlines-stock-sell-planes-cut-jobs.html
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