Spirit Airlines (SAVE, Financial) surged by 45% after the budget airline clinched a deal to extend a crucial debt-refinancing deadline. With the new date set for December 23, Spirit is racing against the clock to either restructure or refinance its $1.1 billion in debt while keeping its credit-card processing agreement intact. The carrier, which has faced four straight quarters of EPS losses, is now scrambling to stabilize with a $300 million drawdown on its revolving credit line to end 2024 with over $1 billion in liquidity.
The stakes couldn't be higher. Spirit's stock has nosedived by more than 90% this year as losses pile up and debt weighs heavy on its balance sheet. The company is no stranger to turbulence, especially after a federal judge blocked its merger with JetBlue, slamming the brakes on what could have been a crucial lifeline. Now, with a short interest of 32.6% keeping pressure on the stock, Spirit's path forward is clear—get the finances in order, fast, or risk an even harder landing. The talks with bondholders may be "ongoing," but time is running out, and investors want results, not just promises.
For shareholders still hanging on, the latest debt extension offers a flicker of hope that the airline can pull off a turnaround. But it's a tough sell. Spirit is staring down a ticking clock and mounting challenges. This extension buys a bit of breathing room, but the road to recovery is far from smooth, and the company has everything to prove before the year is out. Investors will be watching closely to see if Spirit can hit some much-needed altitude or if it's headed for another nosedive.
