Abhijith Ganapavaram

By Abhijith Ganapavaram (Reuters) -Spirit Airlines announced on Friday it was assessing options to refinance its 2025 debt maturities amid concerns over its balance sheet, and said its $3.8 billion deal to merge with JetBlue Airways remained intact. Shares of Spirit shot up 20% to $6.83 in morning trade, after losing more than half their value since a Tuesday ruling by District Judge William Young found the proposed deal could threaten competition in the U.S. aviation market and harm ticket prices. If successful, the deal will create the fifth-largest carrier in the United States and help Spirit secure its survival. The ultra-low-cost carrier has been struggling to report profits due to increased operating costs and supply chain issues, creating uncertainty over its ability to pay down debt due to mature next year. Following the ruling, some analysts said the carrier might contemplate a bankruptcy filing to streamline its balance sheet and reorganize into a financially robust airline. Reuters reported on Thursday that Spirit was looking at options to refinance its debt and was not considering restructuring. The Florida-based airline said on Friday its merger agreement with JetBlue "remains in full force and effect", after Reuters reported earlier in the day that Spirit was seeking to convince its rival to appeal the judge's decision. JetBlue was not immediately available for comment. Spirit also said it had made considerable progress in compensation talks with supplier Pratt & Whitney over several jets that were grounded due to a powdered-metal issue in its geared turbofan (GTF) engines. "While no agreement has been reached to date, the company believes the amount of compensation it will receive will be a significant source of liquidity over the next couple of years," Spirit said in a filing. Pratt & Whitney-parent RTX Corp was not immediately available for comment. "We don't think a bankruptcy filing is a foregone conclusion albeit GTF compensation, how much work Spirit has done to address fixed costs to support a smaller operation, and the domestic environment are all important variables," Raymond James analyst Savanthi Syth said. Spirit also forecast fourth-quarter revenue at the top end of its initial guidance. Revenue is expected to be $1.32 billion, compared with analysts' estimates of $1.31 billion, according to LSEG data.

Biography:  https://finance.yahoo.com/news/spirit-airlines-mulls-options-refinance-120324379.html

58%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermines the credibility of the source. It is calculated as:
Analysis.OverallConflictOfInterestScore * 0.3F + Analysis.OverallBiasScore * 0.3F + Analysis.DeceptivenessScore * 0.3F + Analysis.ReadabilityScore * 0.1F

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

The Daily's Verdict

This author has a mixed reputation for journalistic standards. It is advisable to fact-check, scrutinize for bias, and check for conflicts of interest before relying on the author's reporting.

Bias

85%

Examples:

  • The author refers to Spirit Airlines as an ultra-low cost carrier
  • The author uses language that dehumanizes Spirit Airlines by referring to it as cheap and not worth considering.

Conflicts of Interest

50%

Examples:

  • Reuters reported on Thursday that Spirit was looking at options to refinance its debt and was not considering restructuring.
  • Spirit also said it had made considerable progress in compensation talks with supplier Pratt & Whitney over several jets that were grounded due to a powdered-metal issue in its geared turbofan (GTF) engines.

Contradictions

85%

Examples:

  • Following the ruling, some analysts said the carrier might contemplate a bankruptcy filing to streamline its balance sheet and reorganize into a financially robust airline.
  • Spirit Airlines is not in a position to pay down debt due to mature next year, creating uncertainty over the airline's ability to survive.

Deceptions

30%

Examples:

  • As of Dec. 31, 2023, Spirit had $1.3 billion of liquidity.
  • Spirit also forecast fourth-quarter revenue at the top end of its initial guidance. Revenue is expected to be $1.32 billion, compared with analysts' estimates of $1.31 billion, according to LSEG data.

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JetBlue-Spirit Airlines Acquisition Blocked Amid Competition Concerns; Spirit Assesses Refinancing Options as Profits Struggle

JetBlue-Spirit Airlines Acquisition Blocked Amid Competition Concerns; Spirit Assesses Refinancing Options as Profits Struggle

Broke On: Wednesday, 31 January 2024 A federal judge has blocked JetBlue's acquisition of Spirit Airlines due to concerns about competition in the US aviation market and potential harm to ticket prices. The decision marks a milestone in the effort to revive American antitrust law, with President Joe Biden making competition enforcement a central part of his economic policy. Meanwhile, Spirit Airlines is assessing options for refinancing its 2025 debt maturities due to concerns over its balance sheet and increased operating costs. Some analysts have suggested that the airline might consider bankruptcy in order to streamline its balance sheet and reorganize into a financially robust airline, but this is not yet confirmed by either company.