
Core Viewpoint - Spirit Airlines shares surged by up to 65% following a two-month extension of its debt refinancing plan, providing the airline with additional time to manage its $1.1 billion loyalty bonds due next year [1][2]. Financial Situation - Spirit Airlines has fully utilized its $300 million revolving credit facility and anticipates ending the year with over $1 billion in liquidity [1]. - Despite the recent share price increase, Spirit's stock is down nearly 90% year-to-date, contrasting with a 33% increase in the S&P 500 Passenger Airlines index during the same period [3]. Operational Challenges - The airline has struggled to compete in a crowded market as travel demand surged post-pandemic, compounded by the collapse of its $3.8 billion merger with JetBlue Airways due to an antitrust lawsuit [2][3]. - Spirit has not turned a profit in five of the last six quarters, prompting the introduction of premium seating options and enhanced passenger benefits to attract customers [3]. Cost-Cutting Measures - The company plans to cut costs by downgrading approximately 100 captains, offering unpaid voluntary leave to flight attendants, and pausing the hiring and training of new pilots and flight attendants [3]. - Spirit previously announced plans to furlough about 240 pilots and delay Airbus deliveries [4]. Industry Context - The airline industry is facing oversupply issues, particularly during busy travel seasons, which has affected Spirit's competitive position [3]. - Spirit was significantly impacted by an RTX engine defect that required the grounding of flights, further exacerbating its financial difficulties [5].