Spirit Airlines(US:SAVE)2025-11-10 22:11Financial Performance - For Q3 2025, the company reported a pre-tax loss of $315.9 million and a net loss of $317.5 million on operating revenues of $958.5 million, compared to a pre-tax loss of $338.0 million and a net loss of $308.2 million on revenues of $1,197.1 million in Q3 2024[321]. - Operating revenues decreased by $238.6 million, or 19.9%, to $958.5 million for Q3 2025 compared to Q3 2024, primarily due to a 24.1% decrease in capacity and a 6.2 percentage point decrease in load factor, partially offset by a 14.0% increase in average yield[329]. - Operating revenues for the nine months ended September 30, 2025, decreased by $752.8 million, or 20.1%, to $2,990.8 million, driven by a 22.6% decrease in capacity[354]. - The company’s total revenue per passenger flight segment increased by 13.2% to $118.53 in Q3 2025 compared to $104.75 in Q3 2024[319]. - Total revenue per passenger flight segment increased by 6.1% year over year, primarily due to an 8.1% increase in average yield[355]. Operational Changes - The company introduced more than 40 extra-legroom seats and enhanced its Premium Economy product, which includes a carry-on bag and discounts on food and beverages[273]. - The company has implemented strategic reductions in certain markets and capacity, along with discretionary cost reduction strategies, including pilot and flight attendant furloughs[297]. - The average daily aircraft utilization decreased by 27.0% to 7.3 hours in Q3 2025 from 10.0 hours in Q3 2024, with total departures down by 24.9%[319]. - The company plans to downgrade approximately 140 Captains to First Officers and furlough about 270 pilots effective October 1, 2025, incurring $3.6 million in related expenses[326]. - The company is focused on reducing capacity and enhancing operational reliability to improve revenue per ASM, targeting markets with better alignment of capacity and demand[303]. Bankruptcy and Reorganization - The company emerged from Chapter 11 bankruptcy on March 12, 2025, following the confirmation of its reorganization plan[272]. - The company filed for Chapter 11 bankruptcy on August 29, 2025, following a previous bankruptcy in 2024, and is currently operating as a debtor-in-possession[283][284]. - The company adopted fresh start accounting upon emergence from bankruptcy, allocating reorganization value to assets based on fair value[279]. - The company recorded special charges of $13.0 million, $25.4 million, and $5.5 million during the Successor Period and Current Predecessor Period, primarily related to post-emergence restructuring[277]. - The company appointed new members to its board of directors as part of the reorganization process[275]. Debt and Financing - The company issued $840.0 million of senior secured notes due 2030 at an interest rate of 12.00% per annum, with 8.00% payable in cash and 4.00% payable in-kind[275]. - The company entered into an Exit Revolving Credit Facility providing revolving credit loans and letters of credit totaling $275.0 million, reducing to $250.0 million by September 30, 2026[275]. - The company has taken measures to address market challenges, including borrowing $275 million under a Revolving Credit Facility, which matures on March 12, 2028[297]. - The company canceled $1.6 billion of liabilities subject to compromise during the 2024 Bankruptcy and entered into a new Exit RCF of $275 million and issued $840 million of Exit Secured Notes[389]. - As of September 30, 2025, the company had $6.7 billion recorded within liabilities subject to compromise related to its debt obligations[388]. Market Challenges - The company is facing challenges due to elevated domestic capacity and weak demand for leisure travel, impacting pricing and revenues[296]. - There is substantial doubt about the company's ability to continue as a going concern due to ongoing financial challenges and uncertainties[299][300]. - The company expects challenges and uncertainties in business operations to continue for at least the remainder of 2025 due to adverse market conditions[380]. Cost Management - The company’s Adjusted CASM ex-fuel increased to 9.24 cents in Q3 2025 from 8.20 cents in Q3 2024, primarily due to higher salaries, aircraft rent, and maintenance expenses[322]. - Operating expenses decreased by $400.1 million to $1,093.4 million for Q3 2025, primarily due to a decrease in aircraft fuel expense and a net gain on disposal of assets[331]. - Aircraft fuel expense decreased by $120.1 million, or 32.2%, from $373.4 million in Q3 2024 to $253.3 million in Q3 2025, due to a 26.4% decrease in fuel gallons consumed and a 7.7% decrease in average economic fuel cost per gallon[333]. - Salaries, wages, and benefits decreased by $59.8 million, or 14.0%, in Q3 2025 compared to Q3 2024, primarily due to lower headcount and decreased operations[338]. - Other operating expenses decreased by $45.2 million, or 21.1%, compared to Q3 2024, primarily due to a 24.9% decrease in departures[346]. Future Commitments - The company had commitments for aircraft and engine orders expected to be $2.8 million for the remainder of 2025, $22.1 million in 2026, and $1.857 billion in 2030 and beyond[407]. - As of September 30, 2025, the total future payments on contractual obligations amount to $12.586 billion, with $217 million due in 2025 and $1.845 billion due in 2026-2027[419]. - The company has a total of $200 million in cash collateral related to credit card processing arrangements, with $100 million in restricted cash as of September 30, 2025[423].