Spirit Airlines drained a credit facility to shore up cash, likely delaying a bankruptcy filing. Spirit Airlines stock soared early Monday, while JetBlue Airways and Frontier Airlines fell.
In an SEC filing late Friday, the ultra-low cost carrier said it's borrowed all $300 million in a revolving credit facility due September 2026. Spirit Air now expects to end the year with more than $1 billion in liquidity.
Spirit In The Sky, For A While
The cash infusion likely means Spirit Airlines can avoid a bankruptcy filing in the near term. That means no let up in airline competition, especially in the deep discount space.
Spirit Airlines stock shot up 44% early Monday. SAVE stock plunged 91% in 2024 through Oct. 18.
JetBlue stock declined 5.4% while Frontier Airlines sank 2%.
In early 2022, Frontier Air reached a deal to buy rival Spirit, but JetBlue later trumped the offer. But in January 2024, a federal judge blocked the JetBlue-Spirit Air deal, siding with government regulators who feared the deal would reduce competition. Spirit Air, which hasn't turned an annual profit since 2019, has been in danger of going under.
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