Spirit Aviation (FLYYQ) Q2 2024 earnings summary

Executive summary

• Reported a Q2 2024 net loss of $192.9 million and adjusted net loss of $157.9 million, with revenue down 10.6% year-over-year amid industry overcapacity and competitive pressures.

• Transformation strategy underway to reposition as a high-value, low-cost carrier, launching new premium and flexible travel options and enhancing guest experience, with rollout beginning August 2024.

• JetBlue merger was terminated in March 2024; $69 million received from JetBlue as part of the termination.

• Engaged a new marketing agency to support brand repositioning and product launch.

Financial highlights

• Q2 2024 total operating revenue was $1,280.9 million, down 10.6% year-over-year; TRASM was 9.05 cents, down 12.1% year-over-year.

• Operating margin for Q2 was -11.9%; adjusted operating margin was -13.0%.

• Non-ticket revenue per segment declined 9.6% year-over-year to $63.44, impacted by the elimination of change and cancellation fees.

• Adjusted CASM ex-fuel for Q2 2024 was 7.36¢, up 2.9% year-over-year.

• Ended Q2 2024 with $1.1 billion in liquidity, including cash, investments, and a $300 million undrawn revolving credit facility.

Outlook and guidance

• Q3 2024 TRASM expected to decline 6.4%-8% year-over-year; total revenue guidance of $1.155-$1.175 billion.

• Q3 2024 capacity estimated to decrease 0.3% year-over-year; full-year 2024 capacity expected to be flat to down low single digits.

• 2025 capacity projected to be down high single digits due to ongoing engine issues.

• Expects to achieve $100 million in annual run-rate cost savings, with $75 million by year-end 2024.

• Ongoing negotiations to refinance/extend $1.1 billion in senior secured notes due 2025 and $500 million convertible notes due 2026.