Spirit Airlines posted a large loss for its first quarter earnings on Monday as the company struggles to gain steam after the Biden administration successfully prevented its acquisition by JetBlue.
The budget airline posted a net income loss of around $142 million, 37.3% more than this time last year, when the company lost around $104 million, according to the company’s 2024 first quarter results. Competing airliner JetBlue had planned to acquire Spirit in the first half of 2024, creating the fifth biggest airline from the sixth and seventh and allowing it to better compete with other rivals, but it was blocked by a federal judge in January due to an antitrust suit by the Department of Justice (DOJ) under Biden. (RELATED: Red State Taxpayers Are At Risk Of Being Latest Victims Of Electric Vehicle Gambles)
Spirit’s revenues declined in the first quarter by 6.2% year-over-year to around $1.27 billion, while total operating expenses rose 0.7% to $1.47 billion, according to the company’s release. The company had an operating margin of 16.4%, and its earnings per share were diluted by $1.30.
“While we reported a loss in the first quarter 2024, we are making progress towards our financial goals,” Ted Christie, Spirit CEO, said in the release. “I thank the entire Spirit team for their continued focus on running a reliable operation and delivering value to our Guests as we implement our go-forward standalone plan. There are numerous steps to rollout the plan in a successful, orderly fashion, but we are on track and we are excited to unveil the milestones to you over the coming months.”
The DOJ first filed the suit to prevent the merger in March 2023 to stop further airline consolidation that has been gradually occurring in the industry over the past several years. The Biden administration cites the “Spirit Effect” as a key reason for the suit, arguing that the prices offered by all airline carriers are lowered when Spirit is operating in the market.
The halting of the merger has exposed financial issues for the company, which Spirit hoped to solve by merging with JetBlue. Immediately following the suit, Spirit began exploring refinancing options to address around $1.1 billion in debt that is due by September 2025, after already selling a number of planes and leasing them back.
$SAVE – Earnings tomorrow PM
108mil float
25% of float is short
Squeeze Plz pic.twitter.com/pT8nI6TN07— Dale Savage (@Bullish_Swag) May 5, 2024
“The competitive environment remains challenging due to elevated capacity in many of the markets we serve,” Christie said in the release. “Nevertheless, we are confident that the strategic changes we are implementing, together with our cost saving initiatives, will allow Spirit to compete effectively in today’s marketplace and drive continuous improvement in the years ahead.”
The Biden administration, through the DOJ and the Federal Trade Commission (FTC), has launched a number of antitrust suits in a broader push to crack down on big companies, including against a planned merger by grocers Kroger Company and Albertsons Companies, Inc. in February. A federal judge denied another antitrust suit by the FTC in July 2023 seeking to block a $68.7 billion merger of Microsoft and Activision.
Spirit did not immediately respond to a request to comment from the Daily Caller News Foundation.
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