$140 million net loss for Spirit Airlines in first quarter, will furlough up to 260 pilots

Spirit Airlines' disappointing start to the year with the termination of its $3.8bn merger agreement with JetBlue has deepened with its first quarter net loss totalling $142.6 million, with a $1.30 loss per share. It marks an even greater loss than last year's first quarter net loss of $103.9 million. The airline's total operating revenues were down from $1.35bn in last year's first quarter to $1.27bn in the first quarter of this year. Its reported operating loss was $207.3 million, with its adjusted operating loss beating TD Cowen's estimations of $180 million at $175.6 million. Its total operating expenses were up marginally from $1.46bn to $1.47bn year-on-year (YoY). Its total liabilities and shareholders' equity at the end of the quarter was $9.5bn. It ended the quarter with $1.2bn in liquidity. Though, it aims to boost its liquidity after its compensation agreement with Pratt & Whitney for aircraft on the ground (AOG) due to engine issues. ""This agreement should add approximately $150 million to $200 million of liquidity benefit to the business in 2024,"" said Spirit Airlines CFO Scott Haralson. Haralson added: ""We completed a deferral agreement with Airbus to move deliveries from the second quarter of 2025 through the end of 2026, to delivery positions in 2030 and 2031. This will improve 2024 liquidity by about $230 million."" The airline, having suffered a reduced capacity with the deferred aircraft combined with the AOGs, has decided it will furlough up to 260 pilots in September 2024. Haralson added: ""We plan to action other rightsizing initiatives throughout the business as the year progresses to achieve our $100 million cost reduction goal."" ""The competitive environment remains challenging due to elevated capacity in many of the markets we serve,"" said Spirit president and CEO Ted Christie. ""Nevertheless, we are confident that the strategic changes we are implementing, together with our cost saving initiatives, will allow Spirit to compete effectively in today's marketplace and drive continuous improvement in the years ahead."" The airline is also being assisted with its advisors to address its loyalty bond and convertible notes due in September 2025 and May 2026, respectively.