A couple of airline analysts have said they expected Spirit Airlines will file for bankruptcy, followed by liquidation.


https://www.reuters.com/business/aer...th-2024-01-16/



https://www.reuters.com/business/aer...bt-2024-01-19/

then in the townhall, TC said while it is true we are loosing money bankruptcy isn’t even something they’re considering.

After he said that, HB with TD Cowen double down, and stood firm by her analysis that Chapter 11, followed by chapter 7 is the most likely scenario for Spirit Airlines.

https://youtu.be/_6566Xo0Mog?si=bNQTgqAfFJ-RdBny

Who do you guys believe? I think both sides have valid points.

Do you think we are on the verge of bankruptcy and TC was just trying to calm us down, so there wasn’t a mass exodus? I know CEOs do lie sometimes but he did say under oath that he does expect us to return to profitability and I think TC is smart enough not to commit perjury by lying under oath.

HB was wrong in her first assessment that it was unlikely that Jetblue and Spirit would appeal the judges ruling.

Two of these airline analyst are people who normally call-in on the spirit airlines earning calls, I’m sure they have nothing to gain or lose an have an unbiased opinion.

Savanthi Syth with Raymond James

https://www.raa.org/wp-content/uploads/2022/09/2022-Savanthi-Syth.pdf

Helane Becker with TD Cowen

https://www.cowen.com/profile/helane-becker/



What do you all think?

 

TD Cowen also said we are rebounding. So way to go from Ch. 7 to rebound in 2 days.

https://www.marketwatch.com/story/sp...cowen-a992404d

 

I don't think Ted is the guy to do it, but I see a path forward if they can refinance their debt that is due late next year, and scale down the operation, and get aircraft utilization up.

 

Just read any past Airline CEOs statements prior to bankruptcy. He is reading standard lines that are all scripted. Just look at his email this morning and you will see he's preparing everyone for the bad news. CH 11 is inevitable at this point

 

utilization is already up due to all the A/C being down. Demand is low and it's not coming back anytime soon. We can't make money now so pushing debt off that's due next year doesn't do much for the current burn.

 

If you abandon routes where demand is lower and increase frequency with routes that are higher in demand, then you can become break even or profitable, which will extend your runway indefinitely. This may mean selling off more aircraft and downsizing even more. They have enough cash to pay off the debt in 2025, but it only leaves them with a few months until they're insolvent at the current loss rate of 100-150m a quarter. If they can break even or even turn a profit for the next few quarters, when travel demand should go up, they will be in a much better position.

I am not saying this is likely, or Ted and Bendo are even capable of doing it, just saying it is possible to do.

 

Did you factor in the CC holdback of 600m ?

 

TC has an airline to keep alive. He will never spell out the truth of a negative scenario. What the banks are saying is the tell. Right now it seems the banks are not quite on the same page regarding chapter 7, but all of them are acknowledging significant financial challenges with little room for error.

Given this management team has been nothing but errors for the better part of 5 years, makes it hard for me to believe this ship is not an airplane Titanic.

Merger is necessary for survival. Management knows it. Banks know it. DOJ doesnt care.

 

Not once during the trial did the union or management spell out what their plan would be if the merger wasn't approved. It was all talked about like it was going to be a done deal and that it's just a formality.

I expect the worst and hope for the best. I don't trust management to come out and break the bad news or tell the hard truths. I just hope TC doesn't become infamous for some better.com CEO esque layoff.

 

Its a public company. You find out the plan when everyone else finds out the plan, in a SEC filing. This place works the same as every other public company.