It's not exactly good news, but it's definitely less bad than before
The low-price carrier Spirit Airlines is in trouble after a federal judge blocked its merger with JetBlue Airlines for antitrust reasons. It’s not profitable. Its onetime prospective corporate sibling is leaving it hanging out to dry on the question of appealing the merger blockage.
Spirit Airlines stock lost almost half its value on Tuesday, the day the merger was blocked, and kept sliding on Wednesday and Thursday. It has a bunch of debt coming due next year.
So why did its stock price close up 17% Friday?
In an update to investors, a single sentence did a bunch to lift investor expectations: “Adjusted operating margin guidance for the fourth quarter 2023 is positively revised 450 basis points from negative 15 to 19 percent to negative 12 to 13 percent.”
Huh?
In plain-speak, that means it’s losing slightly less money than it expected. The Christmas and New Year’s travel season was good to Spirit — “strong” is the word the company used — and jet fuel became a little cheaper. That means the company is confident in telling the market it won’t be losing quite as much money as it previously thought it would in the fourth quarter.
That’s not great news, but at this point anything that’s not bad news sounds pretty good.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
