The carrier cast ‘substantial doubt” on its ability to continue operations.
A Spirit Airbus A321 (Photo: Shutterstock | Ron Adar)
Spirit reported a net loss of $308 million for the third quarter, according to a delayed filing with the Securities and Exchange Commission on Monday.
The carrier blamed an increasingly challenging pricing environment and the short-term impact of certain policy changes – such as the removal of change and cancellation fees– as negatively affecting revenue performance.
During the same period in 2023, the airline reported a net loss of nearly $158 million. The beleaguered airline has continually posted quarterly losses since the COVID-19 pandemic in 2020.
“In addition, challenging market conditions, including increasing costs, have impacted the Company’s performance,” Spirit stated in its report. “The Company expects these trends to continue for at least the remainder of 2024, which creates uncertainty in operating results.”
Spirit filed for bankruptcy protection on Nov. 18. In Monday’s earnings filing, the carrier recounted that it received approval from the bankruptcy court for a variety of “first day” motions to continue its ordinary course of operations during the Chapter 11 case.
Spirit stated there is a high degree of risk and uncertainty associated with the Chapter 11 cases.
“The outcome of the Chapter 11 Cases is dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court,” the filing stated.
On Nov. 18, Spirit received written notice from the New York Stock Exchange (NYSE) notifying the carrier that shares of its common stock would be delisted from the NYSE per its Chapter 11 filing. Trading of said shares was also suspended immediately.
In the same filing, Spirit cast doubt on its ability to continue operating as normal.
“Based on such evaluation and management’s current plans, which are subject to change and include implementation of discretionary cost reduction strategies and the sale of certain of its owned aircraft, management believes there is substantial doubt about the Company’s ability to continue as a going concern.”
The airline continues to slash costs, including the sale of 23 A320 and A321 aircraft, along with furloughing around 14% of its pilot workforce. In addition, Spirit delayed the filing of its third-quarter results for several months.
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