Spirit Airlines reported a third quarter net loss of $308.2 million, or a basic loss per share of $2.81, in the third quarter of the year. The result nearly doubles its loss from the same period a year prior of $157.6 million.
The airline reported total operating revenues of $1.2bn, down from $1.3bn last year. In addition, total operating expenses climbed from $1.4bn last year up to $1.5bn in the quarter ending September 2024. The carrier reported a total operating loss of $296.4 million, increasing from an operating loss of $188.8 million last year.
Spirit, which filed for a pre-approved Chapter 11 restructuring on November 18, 2024, as well as signing a restructuring support agreement (RSA) with its creditors, noted a going concern for the company in its third quarter report. The carrier cited the “increasingly challenging pricing environment” and “increasing costs” that have hurt its performance. The company said it expects the challenging environment to continue for at least the remainder of the year and will create “uncertainty” in its operating results.
The airline was approved by a US bankruptcy court the following day for all of its requested first day relief in support of its Chapter 11 process. The approval allowed Spirit to continue operations as normal.
The company also noted challenges with the Pratt & Whitney geared turbo fan (GTF) fleet, which powers its A320neo family aircraft. Spirit has reduced its capacity as scheduled removal and inspection of these impacted engines continues. The temporary removal of these engines from service is expected to continue through at least 2026, the company said. Spirit is in discussion with Pratt & Whitney for any of its aircraft that remain unavailable for operational service after December 31, 2024.
During the third quarter, Spirit recognised $29.7 million in credits from Pratt & Whitney related to aircraft on ground (AOG). For the first nine months of the year, it has recognised $104.7 million in credits.
As of September 30, 2024, the airline's total assets were valued at $9.5bn, while its total liabilities and shareholders' equity was also $9.5bn. The airline's total current liabilities were $2.5bn as of the quarter's end, worsening from $1.5bn at the end of the previous quarter.
Net cash used in operating activities for the nine months ended September 30, 2024, totalled $634.3 million. Cash and cash equivalents at the end of the quarter was $593.6 million.
During the nine months ended September 30, 2024, Spirit took delivery of 17 aircraft under direct operating leases, seven aircraft under sale leaseback transactions, and purchased four spare engines with cash - one of which was purchased off lease. As of the end of the quarter, Spirit had a fleet consisting of 217 A320 family aircraft. The fleet consists of 143 aircraft financed under operating leases with lease term expirations between 2025 and 2042, as well as owning 56 aircraft - five of which were unencumbered, and also had 18 aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions.
The company's total operating and finance lease obligations for the remainder of the year are $142.4 million, as well as around $556.7 million in 2025, and $530.2 million in the following year.