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Spirit Airlines shares lose altitude after judge blocks its purchase by JetBlue
Spirit Airlines shares continued their descent after a federal judge this week blocked its acquisition by JetBlue Airways for $3.8 billion.
The Wall Street Journal reported Thursday that Spirit is exploring its strategic options following the legal setback, including ways of dealing with a $1.1 billion debt pile coming due in 2025.
Spirit didn’t respond to a request for comment.
U.S. District Judge William Young on Tuesday ruled in favor of federal antitrust enforcers who had sued to stop the deal on grounds that it would hurt airline industry competition and raise prices for budget-conscious travelers.
JetBlue and Spirit contend a merger would allow the enlarged carrier to offer low-cost fares in more markets around the country and help it compete with the largest U.S. airlines. The companies said they they are assessing their legal options.
Spirit’s stock price fell 19% in early afternoon Thursday to roughly $5 before rebounding slightly to $5.72. The shares have plunged roughly 68% since Young blocked the deal.
Spirit, based in Miramar, Florida, saw its revenues plunge in 2020 as the COVID-19 pandemic crippled air traffic, and continued to struggle the following year. Although the airline’s top-line results have rebounded since then as travelers returned to the skies, its financial losses have swelled.
For the company’s most recent quarter, Spirit in October reported a net loss of $157.6 million, extending a string of losses dating back to 2020.
The downturn comes as bigger carriers like American Airlines, Delta and United increasingly compete with discount players in key markets.
Spirit’s downbeat financial results have stirred speculation about its long-term prospects, with some Wall Street analysts saying the airline could be headed for bankruptcy.
Although Spirit could seek a deal with another buyer, “a more likely scenario is a Chapter 11 filing, followed by a liquidation,” Helane Becker, a veteran airline analyst with financial services firm Cowen, said in a report. “We recognize this sounds alarmist and harsh, but the reality is we believe there are limited scenarios that enable Spirit to restructure.”
—The Associated Press contributed to this report.
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A Frontier flight appeared to catch fire as the plane was landing Saturday at Harry Reid International Airport in Las Vegas, Nevada. Cell phone video showed flames and billows of smoke on the plane’s undercarriage as it touched down on the runway. Fire trucks and other emergency service vehicles rushed onto the runway, as smoke continued to surround the plane.
“Frontier flight 1326 experienced a hard landing,” a spokesperson for the airport confirmed to CBS News. “The Clark County Fire Department responded immediately and all passengers and crew have been safely transported to the gated area. No injuries were reported.”
Frontier flight 1326 from KSAN-KLAS just caught fire on landing at KLAS.
I caught it on video as it landed pic.twitter.com/KGt1Asx3rv
— Tyler (@TylerHerrick) October 5, 2024
Frontier Flight 1326 left San Diego at 1:51 p.m. Pacific Time and landed at Las Vegas at 3:37 p.m., according to Flight Aware.
“The pilots detected smoke and declared an emergency,” a spokesperson for Frontier Airlines confirmed to CBS News. “The aircraft landed safely and all passengers and crew were evacuated via airstairs. No injuries were reported, and passengers have been bussed to the terminal. The cause of the incident is currently under investigation.”
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$100 million in federal funds released for North Carolina to rebuild roads, bridges damaged by Helene
Washington, D.C. – The U.S. Department of Transportation released $100 million in emergency funds on Saturday for North Carolina to rebuild its roads and bridges damaged by Helene.
“We are providing this initial round of funding so there’s no delay getting roads repaired and reopened, and re-establishing critical routes,” said U.S. Transportation Secretary Pete Buttigieg in a statement. “The Biden-Harris administration will be with North Carolina every step of the way, and today’s emergency funding to help get transportation networks back up and running safely will be followed by additional federal resources.”
The storm caused rampant flooding that has devastated several towns and killed more than 225 people – with CBS News confirming at least 114 people killed in North Carolina. There was more than 8 inches of rain across the western North Carolina mountains, with some areas seeing more than a foot.
Hundreds of roads across Western North Carolina remain closed, leading to an increase in air traffic as teams scour the region for survivors by air. Air traffic over Western North Carolina has increased by 300% due to relief efforts since the storm cleared, the Federal Aviation Administration and the North Carolina Department of Transportation.
Mudslides blocked Interstate 40 and other highways in North Carolina and about 400 roads were closed due to damage from Helene. Interstate 40 was damaged at several locations, the Department of Transportation said.
President Biden visited the Carolinas on Wednesday, surveying the flood damage by air from Greenville, South Carolina, to Asheville, North Carolina. Mr. Biden announced the federal government would cover “100%” of all debris removal and emergency protective measure costs in North Carolina for six months.
The Department of Transportation said these relief funds will allow the North Carolina Department of Transportation to act more quickly to fund eligible repairs to their damaged facilities.
Li Cohen and
contributed to this report.
