Latest news with #FLYY
Yahoo
6 days ago
- Business
- Yahoo
Cash Crash Warning: How Should You Play Spirit Airlines Stock Here?
Spirit Airlines (FLYY) shares crashed another 40% on Tuesday after the low-cost airline issued a stark warning: It may not survive as a going concern unless it raises fresh capital. Last month, the air carrier said it will furlough another 270 pilots this fall to further reduce costs, but the announcement this morning suggests its financials are not improving as quickly as creditors want. More News from Barchart This High-Yield (7%) Dividend Stock Is Down Significantly in 2025. Should You Buy the Dip? Dear CoreWeave Stock Fans, Mark Your Calendars for August 14 Tesla Is Axing Its Dojo Supercomputer Plans. What Does That Mean for TSLA Stock Here? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. The budget airline has been a disaster for investors ever since it emerged from bankruptcy about five months ago. At the time of writing, Spirit Airlines stock is down well over 65% compared to its price in late April. Here's Why You Should Sell Spirit Airlines Stock Immediately If Spirit Airlines fails to secure additional funding, it risks sliding back into insolvency, this time without the cushion of restructuring momentum. The air carrier has already furloughed hundreds of pilots and faces a brutal pricing environment due to excess domestic flight capacity. Without a cash lifeline, its operations could grind to a halt, leaving shareholders with little to no recovery. In such scenarios, equity holders are often wiped out entirely. In short, the risk of total capital loss looms large, making a swift exit from Spirit Airlines stock a rational move for investors. Why Cash Infusion Wouldn't Be a Positive for Spirit Airlines Stock Even if Spirit Airlines manages to raise fresh capital, the terms are unlikely to favor its existing shareholders. Given the company's fragile balance sheet and continued losses, any new financing through stock offerings or high-cost debt will come at a deep discount, meaning significant dilution for current investors. Therefore, a cash infusion might buy time, but it wouldn't solve the underlying cost and demand-related issues. Simply put, even a successful raise may not be sufficient to justify holding Spirit Airlines stock here. Finally, FLYY shares do not receive limited coverage from Wall Street analysts, which may also be a huge red flag for serious investors. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-08-2025
- Business
- Yahoo
Spirit Airlines stock craters on warning it could go out of business
Spirit Aviation Holdings (FLYY) stock, the parent company of troubled Spirit Airlines, tumbled on Tuesday after the airline operator said it was running out of cash and could soon go out of business. 'The Company has continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel in the second quarter of 2025, resulting in a challenging pricing environment,' Spirit said in its second quarter financial disclosure. 'As a result, the Company continues to experience challenges and uncertainties in its business operations and expects these trends to continue for at least the remainder of 2025.' Though the company was trying to alleviate its financial situation with initiatives such as pilot furloughs, selling spare engines, and potential sales of aircraft, real estate, and excess airport gate capacity, the 'uncertainty of successfully completing the initiatives" meant that management felt there was 'substantial doubt as to the Company's ability to continue as a going concern' over the next 12 months. Spirit Aviation shares cratered over 40% in midday trade. Spirit's bumpy ride Spirit Aviation Holdings emerged from the financial restructuring of Spirit Airlines on March 12, and has faced a difficult time ever since. The bankruptcy was brought on following a failed takeover by JetBlue Airlines, with both airlines citing regulatory issues standing in the way of the merger both desired. This followed Spirit rejected overtures from budget operator Frontier earlier in the year, after Frontier rejected Spirit's counteroffer. Spirit's reorganization resulted in taking on $795 million in debt and brought in $350 million in new equity and set up a $275 million credit line. It is the minimum liquidity requirements of Spirit's debt obligations, and collateral required by Spirit's credit card processing agreements that have Spirit in bind, because those agreements require Spirit's operations to improve faster than the company anticipated. New CEO Dave Davis has been implementing the current strategy of appealing to higher-spending travelers with a premium economy program, updating Spirit's frequent flyer program, and announcing new partnerships with other airlines and travel businesses to boost demand. But the company ended up booking only $1.02 billion in revenue in the just completed quarter, resulting in a net income loss of $245.83 million, and loss per share of $7.24. Excess capacity, especially with budget conscious consumers, has been an industry problem for some time now. Delta (DAL) CEO Ed Bastian told Yahoo Finance last month that the industry is going to reward airlines like that have invested in premium services, particularly those that can deliver that experience at the right price. 'That's been a big change in the industry that is 100 years old,' Bastian said about the growing trend of premium services. 'The carriers that have invested heavily in reliability, products, service offerings are the ones that are able to price for it, and [they] give consumers the value and experience they want.' Pras Subramanian is the lead transportation reporter for Yahoo Finance. You can follow him on X and on Instagram.
Yahoo
12-08-2025
- Business
- Yahoo
Spirit Airlines sounds the alarm on its future ability to stay in business
NEW YORK (AP) — Just months after emerging from Chapter 11 bankruptcy, Spirit Airlines is warning about its future ability to stay in business. Spirit Aviation Holdings (FLYY), the budget carrier's parent company, says it has 'substantial doubt' about its ability to continue as a going concern within the next year — which is accounting-speak for having the resources needed to sustain operations. In a quarterly report issued on Monday, Spirit pointed to 'adverse market conditions" that it's continued to face despite recent restructuring and other efforts to revamp offerings. That includes weak demand for domestic leisure travel, which Spirit said persisted in the second quarter of its fiscal year — among other challenges and 'uncertainties in its business operations' that the Florida-based company expects to continue 'for at least the remainder of 2025.' Known for its no-frills, low-cost flights on a fleet of bright yellow planes, Spirit has struggled to bounce back to profitability and boost resources to compete with rivals since the COVID-19 pandemic. Rising operation costs and mounting debt eventually led the company to seek bankruptcy protection in November. By the time of that Chapter 11 filing, the airline had lost more than $2.5 billion since the start of 2020. When Spirit emerged from bankruptcy protection in March, the company successfully restructured some of its looming debt obligations and secured new financing for future operations. Spirit has continued to make other cost-cutting efforts since — including plans to furlough about 270 pilots and downgrade some 140 captains to first officers in the coming months. Those furloughs and downgrades, both announced in July, are set to go into effect Oct. 1 and Nov. 1 to align with Spirit's 'projected flight volume for 2026,' the company noted in its quarterly report. They also follow previous furloughs and job cuts taken before the company's bankruptcy filing last year. Despite these and other cost-cutting efforts, Spirit on Monday stressed that it needs more liquidity. As a result, the company said it may also sell certain aircraft and real estate. Spirit's aircraft fleet is relatively young, which has made the airline an attractive takeover target over the years. But such buyout attempts from budget rivals like JetBlue and Frontier were unsuccessful both before and during the bankruptcy process. Spirit's shares tumbled more than 40% Tuesday morning, with the company's stock trading at just over $1.80 as of around 11 a.m. ET.
