Spirit Airlinesthe Florida-based low-cost airline, is increasingly suffering from a depressed US aviation market. The carrier warned its investors that there was a "substantial doubt as to its ability to continue its activities beyond the next twelve months. At issue: persistent losses, revenues down 20 % year-on-year and increased collateral requirements from credit card companies. These are gradually eating into Spirit's cash flow.
The carrier has already laid off 270 pilots in July and downgraded the status of 140 others. It has also reduced its flight schedule this summer. And is now looking to raise cash quickly by selling spare engines and its airport sites. If necessary, Spirit Airlines could even sell its aircraft. " However, there is no guarantee that these measures will suffice. "warns management.
Spirit Airlines is suffering from both the slowdown in US domestic demand and pressure from its creditors. Since its emergence from bankruptcy, the company recorded a net loss of $256.7 million. Its "ultra low cost" model, which has helped drive down prices in the United States, is now under threat.
The disappearance of Spirit would cause domestic prices to soar
This scenario is all the more worrying given that the attempted takeover by JetBlue Airways was blocked in early 2024 by a federal judge on antitrust grounds. The judge highlighted the "Spirit effect". At the time, he felt thatThe carrier's entry into a market reduced competitors' prices by an average of 7 to 11 %..
According to theair analyst Scott KeyesThe disappearance of Spirit would automatically push up air fares, even for passengers who have never flown with the airline. Its withdrawal from certain markets has already led to spectacular increases. On the Denver-Fort Lauderdale route, for example, fares have risen by 22 % since its withdrawal.
For the CEO Dave DavisSpirit is not doomed, but is fighting against the clock. It remains to be seen whether the company will find the financial support it needs to complete the year.
