SAVE - Spirit Airlines: Headed Into A Potential Financial Disaster In 2025 May Need Restructuring

2024-05-13 09:22:52 ET

Summary

• Spirit has almost $2.0 billion in debt maturing within the next 2 years.
• First quarter revenue was down 6.2% and the airline reported a loss of $1.30 per share.
• There was a settlement in 2024 with Pratt & Whitney for planes on the ground because of PW1100G-JM geared turbofan issues.
• If Spirit can't negotiate deals to extend debt maturities, they may need to eventually do an in-court-restructuring.

Spirit Airlines ( SAVE ) is facing a number of very serious challenges. The airline has almost $2.0 billion debt maturing within the next two years, a large number of planes are expected to be on the ground next year because engine inspections/maintenance, and competition in the low-cost airline market is increasing. In theory, Spirit might be able to negotiate exchange offers to extend debt maturities, but I have my doubts. I think that Spirit Airlines will eventually need to do an in-court restructuring in order to survive....

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