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Spirit Airlines investor filing
Document Contents
COVID-19 Pandemic Update As the COVID-19 pandemic evolves, the Company’s financial and operational outlook remains subject to change. The Company continues to monitor the impacts and to implement mitigation strategies while working to preserve cash and protect the long-term sustainability of the Company. As of February 29, 2020, the Company had unrestricted cash and short-term investments of approximately $1,018 million. In response to government restrictions on travel and drastically reduced consumer demand, the Company expects to reduce capacity from its original plan by approximately 45% and 75% in April and May, respectively. However, the situation is very fluid and actual capacity adjustments may be different than what the Company currently expects. The Company has taken, or intends to take, additional action, including: • Monitoring demand and continuing to adjust capacity as needed; • Pursuing additional financing secured by the Company's unencumbered assets; • Suspending $50 million to $75 million of planned capital spending related to certain non-aircraft capital projects; • Reducing planned non-fuel operating costs by $20 million to $30 million, excluding savings related to reduced capacity; • Freezing hiring across the company except to fill essential front line and management roles; • Engaging in discussions with the Company's significant stake holders and vendors regarding financial support or contract adjustments during this transition period; • Engaging with the U.S. government, local authorities and industry groups regarding a support package to protect the U.S. airline industry, its employees and many other stakeholders. Additionally, Ted Christie, the Company's Chief Executive Officer and President has reduced his base salary by 30%. All Senior and Executive Vice Presidents and members of the Board of Directors have reduced their compensation as well. The Company anticipates it may implement further discretionary changes and other cost reduction and liquidity preservation measures as needed to address the volatility and quickly-changing dynamics of passenger demand and the impact of revenue changes, regulatory and public health directives and prevailing government policy and financial market conditions. |
No net effect on share prices after this news, most likely priced in already.
EDIT: We are currently up nearly 3% in after hours trading because apparently this market rockets up into the green on horrendous news. |
Would be nice if he addressed the bailout package more thoroughly in the company email. Will there be no furloughs or displacements until at least Sep 30?
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Originally Posted by NKSpilot
(Post 3012849)
Would be nice if he addressed the bailout package more thoroughly in the company email. Will there be no furloughs or displacements until at least Sep 30?
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This bill will be "Pelosi'd" before it reaches DJT's desk
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Originally Posted by spirited
(Post 3012857)
This bill will be "Pelosi'd" before it reaches DJT's desk
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Originally Posted by FNGFO
(Post 3012855)
They have to actually pass a final bill first before he can deliver solid plans to employees.
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Originally Posted by NKSpilot
(Post 3012894)
“Spirit family,...this will help our airline in the following ways...a.b.c.d...please help our efforts by contacting your representatives...thanks for all you do”
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So I’m not sure what the plan is?
A. Take the Grant, limit your ability to buyback stock (which is low right now and will be for a while) and pay 2,000 pilots and F/As to sit at home collecting MMG? or B. Say the hell with the grant, furlough 2,000 pilots and hope people start flying by Sept/October? And if it does pick back up, buy back stock, appear as the HERO to the Board and give yourself a raise..... I mean this is the American way and I absolutely wouldn’t put it past them to take that type of a gamble) remember......this is AMERICA, business exists for the sole purpose of enriching the shareholder....... I do not see demand picking back up in June/July |
I’m sure it’s a fairly basic cost benefit analysis of assumed demand and compensations costs versus furlough costs as projected on September 30th.
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Originally Posted by FNGFO
(Post 3012913)
I’m sure it’s a fairly basic cost benefit analysis of assumed demand and compensations costs versus furlough costs as projected on September 30th.
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Furloughs cost the airlines a lot of money. They don’t want to furlough.
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Originally Posted by 69fastback
(Post 3012919)
Furloughs cost the airlines a lot of money. They don’t want to furlough.
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Originally Posted by 69fastback
(Post 3012919)
Furloughs cost the airlines a lot of money. They don’t want to furlough.
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Originally Posted by godsgift2aviatn
(Post 3012961)
Spirit only has one fleet type. It's not going to cost nearly as much as companies with multiple fleets that will see a domino effect in vacancy rebidding.
filler |
Whether it costs more to other airlines is irrelevant. It’s still expensive, and I’d guess we will see options like other airlines have explored, such as offering 50 hours pay and benefits, for a big chunk of lines before we see furloughs. Not to say there won’t be furloughs, but there could be other options explored. Time will tell......
For now, all anyone can do is keep doing what’s asked of us, or explore other options. It’s a tough spot. |
it will be interesting to see how the ULCC/LCC model works in the coming months.
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Originally Posted by senecacaptain
(Post 3013030)
it will be interesting to see how the ULCC/LCC model works in the coming months.
probably better than the bloated, multi-fleet legacies. we would have SAILED through this downturn if we didn’t take on so much Debt recently............ |
Originally Posted by SAABoroowski
(Post 3012929)
yeah but there is literally no demand AT ALL. and lets be honest, Nobody knows when this PANDEMIC will be over and people will start flying again
If you follow China it was a 120 day event or so. We are closing in on a month now. Your right who knows when it actually ends, but at least pilots and crew can be taken care of with this grant for the next half a year. I suspect by mid to late summer things will be moving forward again. Not saying it will be back to the same level as before this started, but it’s certainly going to be more than flying 25% of our schedule. |
Bill Gates saying this level of shutdown or more nationally until at least the end of May or early June, and if we don’t it will spike again and maybe have to start over. If we proceed til the end of May then strong Intl restrictions after to prevent reseeding.
anything in April is a pipe dream apparently so if the school year is going to be shot do we cancel summer vacation and have make up “virus days” all summer? |
Originally Posted by Qotsaautopilot
(Post 3013197)
Bill Gates saying this level of shutdown or more nationally until at least the end of May or early June, and if we don’t it will spike again and maybe have to start over. If we proceed til the end of May then strong Intl restrictions after to prevent reseeding.
anything in April is a pipe dream apparently so if the school year is going to be shot do we cancel summer vacation and have make up “virus days” all summer? I also think holding the world hostage until end of MAY is just not realistic at all. You might have keep those high risk individuals home, or prepare makeshift hospitals with proper equipment but living like this until the end of May? I hope not |
Originally Posted by Qotsaautopilot
(Post 3013197)
Bill Gates saying this level of shutdown or more nationally until at least the end of May or early June, and if we don’t it will spike again and maybe have to start over. If we proceed til the end of May then strong Intl restrictions after to prevent reseeding.
anything in April is a pipe dream apparently so if the school year is going to be shot do we cancel summer vacation and have make up “virus days” all summer? |
Originally Posted by FNGFO
(Post 3013222)
No. You pass Go and proceed straight to the next academic school year.
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Originally Posted by Qotsaautopilot
(Post 3013197)
so if the school year is going to be shot do we cancel summer vacation and have make up “virus days” all summer?
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Originally Posted by LandGreen
(Post 3013249)
This is what I’m hearing. Demand will likely not swing back much over summer even if things return to normal for the rest of the country. Lots of kids will be making up school this summer, not taking family vacations.
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Originally Posted by SAABoroowski
(Post 3013258)
kids are doing online classes, there won’t be make up during summer
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Originally Posted by SAABoroowski
(Post 3013212)
My kid has been doing Home Schooling via Google Classroom etc, so there is no need to make up the missed days.
I also think holding the world hostage until end of MAY is just not realistic at all. You might have keep those high risk individuals home, or prepare makeshift hospitals with proper equipment but living like this until the end of May? I hope not |
Originally Posted by SAABoroowski
(Post 3013258)
kids are doing online classes, there won’t be make up during summer
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Originally Posted by booter24
(Post 3013386)
you’re assuming every kid has online capabilities......there will be kids going to school over the summer.
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My kids go to private so it’s a little different. But public schools in Michigan were told nothing counts during this since they can’t guarantee that every kid has access to WiFi and a computer. They haven’t said what the ramifications of that will be yet though.
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Originally Posted by MCDUmanipulator
(Post 3013392)
don’t think kids that don’t have internet would be going on summer vacations anyway.
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Originally Posted by Conquistador27
(Post 3013430)
My kids go to private so it’s a little different. But public schools in Michigan were told nothing counts during this since they can’t guarantee that every kid has access to WiFi and a computer. They haven’t said what the ramifications of that will be yet though.
(disregard, I see you said private school) |
Originally Posted by 69fastback
(Post 3013020)
Whether it costs more to other airlines is irrelevant. It’s still expensive, and I’d guess we will see options like other airlines have explored, such as offering 50 hours pay and benefits, for a big chunk of lines before we see furloughs. Not to say there won’t be furloughs, but there could be other options explored. Time will tell......
For now, all anyone can do is keep doing what’s asked of us, or explore other options. It’s a tough spot. hmmmmmmm........ |
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