Local Airline Admits Serious Financial Turbulence. Stock Plummets As Bankruptcy Rumored. Market Cap Nearly Value Of Just One Boeing 737.
BY: STAFF REPORT | BocaNewsNow.com
BOCA RATON, FL (BocaNewsNow.com) (Copyright © 2024 MetroDesk Media, LLC) — If you’re thinking about buying a ticket on Spirit Airlines (NYSE: SAVE) for the holidays, you may want to consider another airline. Or, at the very least, use a credit card that has a good dispute resolution process. Fort Lauderdale-based Spirit is facing massive financial problems and could be heading for bankruptcy. The airline itself issued this statement hours ago, following a financial disclosure filed with the Securities and Exchange Commission:
“The Company estimates its third quarter 2024 operating margin and adjusted operating margin will each be approximately 12 percentage points lower than the operating margin and adjusted operating margin reported for the third quarter 2023 due to lower total operating revenues and higher total operating expenses. Total operating revenues are estimated to have decreased approximately $61 million compared to the third quarter 2023 primarily due to lower average yields, including the negative impact from the Company no longer charging for change and cancellation fees.
Total operating expenses are estimated to have increased approximately $46 million and adjusted operating expenses are estimated to have increased approximately $52 million compared to the third quarter 2023. Total operating expenses and adjusted operating expenses are estimated to be higher year over year primarily due to an increase in aircraft rent expense, other operating expense, salaries, wages and benefits, and landing fees and other rents expense. These increases were partially offset by a decrease in aircraft fuel expense.”
The airline’s stock is down 57.73 percent as of just after noon on Wednesday. It’s trading at only $1.36. By comparison, Delta is trading at $64.70, while American is trading at $14.27. United Airlines is trading at $90.48. We note the market cap for Spirit Airlines is $149 Million, slightly more than the price of one Boeing 737.
