More debt and more stock
 

I don’t take these as good signs. We aren’t AA and I’m not a financial wiz but I didn’t expect us to be taking on more debt and issuing more stock as things seem to be on the upswing. We are already heavily levered.

https://m.marketscreener.com/quote/s...ntent=20210427

Gotta pay for planes somehow.... I foresee C2018 lasting till....2030?

EDIT: after rereading the article, it looks like some of the debt issued to payoff other debt at a different interest rate. So, some reshuffling of deck chairs?

Some. Net increase though.

I think we all knew C2018 would be stalled out as long as they possibly could. Par

As long as we can service the debt, it shouldn’t be a problem. Watching Squawk on the Street right now and just heard that Goldman is calling oil going up to $80. That’ll definitely erode our margins if it happens....

Agreed. Just like the US government debt doesn’t have to be paid off at a corporation as long as you can service it and roll it over. Unlike you and me that have retirement and death in the future.

Just don’t want the debt to be crippling and Spirit isn’t exactly on the healthy debt side IMO and getting more is not the news I wanted to see.

Kind of tough to tell if the net benefit of the squeeze oil prices places on our competition is greater than the affect on ours. The rumor has always been Spirit is at an advantage vs legacy competition at oil at that range.

Definitely huh? This company has posted some of its best margins when oil was pushing $100/barrel. Cheaper oil has actually hurt us.

Taking on low interest debt to pay off high interest debt is usually a good idea. And three years ago there was a long waiting list to get any A320 family aircraft and the demand for them - particularly with the MAX grounded - had driven up prices:

https://www.ft.com/content/a495bc06-...9-6917dce3dc62

Today, with ordering airlines having gone bankrupt or deferring those buys, Airbus is anxious to get the cancelled and deferred aircraft off the lot and can get you one as quickly as they can repaint it - often at at the lowest prices they have ever sold them. And leasing companies that reclaimed aircraft from bankrupt carriers are anxious to part with late model low time aircraft at even lower prices.

Look at the growth plans. Even the aircraft they have managed to move forward from later scheduled deliveries won’t be enough to grow 15-17% per year.



This is the time to be bold, if ever there was one.

If we’re able to pass the cost on to the passengers, then yes, we are at an advantage as we have more seats per airframe to disperse the added cost. If we aren’t able to pass it on, we’ll then you know....

See above....

Everyone passes the cost on to passengers.

The legacies, bolstered by payroll support and low oils prices have been able to tap into the ULCC domestic market to keep their metal and some cash flow moving. High fuel costs is not something most of them are in a position to ignore to quash low cost competition.

Ticket prices will go up for everyone, but the non ULCC competition will be less able to play in our park. Imoho anyway.

Also, a lot of analysts are saying business travel won't come back for a while, due to the viability of online meeting software. Most travel will be for leisure over the next few years, if not forever. This puts a big dent in Delta's business model.

Having literally billions of dollars in hardware optimized for flying that IATA says isn’t going to rebound for a few years is a huge overhead cost, as are multi-type fleets in general. And the A321 NEO, it doesn’t matter who is flying it - is going to severely impact the WB monopoly on some of the shorter international routes. And while the legacies can, have, and will use their wide bodies on heavily traveled longer hub to hub domestic routes the CASM will never really be competitive with aircraft optimized for those routes. And the higher percentage of more fuel efficient NEOs in the ULCC fleets of F9 and NK are going to mean they are less effected by higher fuel costs.

If the ULCCs can’t outhustle the legacies in this environment I’ll be greatly surprised.

RASM and CASM are out and ESG is in. Welcome to the great reset.

Fitch just looked at a lot of that debt today and was pretty happy with it and they are pretty conservative about airline debt right now:


https://i.ibb.co/2sT3wX4/5-E186-FE1-...0-FCC68-F5.jpg

Buying aircraft at rock-bottom prices is actually a pretty good deal if you can gainfully employ them, even if you take on debt to do it. Assuming it IS the bottom, and you CAN gainfully employ them. But if they are going to get the growth they anticipated in the last earnings call they will need additional aircraft purchases.

We will see what the earnings are soon for all airlines