Spirit Airlines shares increased by 16% on Friday after the company struggled with carrier budget. The company would cut jobs and sell aircraft to reduce costs.
Moreover, Spirit Airlines stock closed on Friday at $2.79 per share, down from $2.46 as expected last month.
Spirit said in a securities filing that the carrier budget on Thursday planned to sell 23 older Airbus aircraft. This could reduce costs and bring in $519 million. Furthermore, it said that the company would cut jobs to recover about $80 million in costs.
A better industry environment and peak travel periods could also improve Spirit Airlines’ revenue. This quarter’s Christmas holiday period will be especially beneficial for the company.
Based on the CNBC blog post:
“Spirit didn’t immediately comment on how many employees it will cut but said its 2025 capacity will be down in the mid-teen percentage point range compared with this year. It started furloughing about 200 pilots in September. Flight attendants “are well-positioned” because so many crew members took voluntary leaves of absence, according to the company.”
In recent weeks, airline stocks have increased due to lower prices of oil which makes jet fuels cheaper. Even with surged stocks, Spirit Airlines’ carrier budget plunged 80% this year.
According to The Wall Street Journal reports, Spirit Airlines planned to revive the merger agreements with Frontier Airlines by sending higher shares. Previously, in April 2022, JetBlue derailed both airline’s agreements.
However, Spirit Airlines forecasted its third-quarter negative operating margin of 24.5% late Thursday. The margin is better than the previous one by 29% for three months.
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