Spirit Airlines sees Q3 capacity down 1.2% y/y

In a regulatory filing, the company states: “On October 18, 2024, Spirit Airlines (SAVE) entered into a binding term sheet with GA Telesis, LLC for the sale of 23 A320ceo/A321ceo aircraft to GAT for an expected total purchase price of approximately $519 million. The Aircraft are planned for delivery beginning in October 2024 through February 2025. On October 24, 2024, Spirit Airlines, Inc. provided an update to investors announcing certain preliminary estimates for the third quarter 2024. The Company’s unaudited interim consolidated financial statements for the third quarter 2024 are not yet complete and results may vary from these preliminary estimates upon completion of closing procedures. The Company estimates the net proceeds of the Sale, combined with discharging the Aircraft-related debt from its balance sheet, will benefit its liquidity by approximately $225 million through year-end 2025. The Company estimates its third quarter 2024 adjusted operating margin will come in approximately three hundred basis points better than the mid-point of its previous guidance range, primarily due to stronger-than-expected revenue with early results from its transformation plan exceeding initial expectations. The Company’s third quarter 2024 capacity was down 1.2 percent year over year, and the Company estimates its fourth quarter 2024 capacity will be down approximately 20 percent year over year. The Company plans to provide additional details regarding its third quarter 2024 performance in conjunction with reporting its third quarter results which it plans to release in mid-November. For the full year 2025, the Company estimates its capacity will be down mid-teens year over year. This decrease takes into account the sale and removal from scheduled service of the Aircraft, a year-over-year increase in the estimated number of neo aircraft removed from scheduled service due to the reduced availability of Pratt & Whitney geared turbofan engines, the retirement of the Company’s remaining A319ceo aircraft and the addition of six new A321neo aircraft scheduled for delivery in 2025. As part of its continued strategy to return to profitability, the Company has identified approximately $80 million of annualized cost reductions that it plans to begin implementing in early 2025. These cost reductions are driven primarily by a reduction in workforce commensurate with the Company’s expected flight volume. As previously disclosed, the Company remains in active and constructive discussions with holders of its senior secured notes due 2025 and convertible senior notes due 2026 with respect to their respective maturities.”