Spirit Airlines, Inc. (NYSE: $SAVE)

Spirit Airlines, Inc. (NYSE: $SAVE) is a commercial airline company specializing in providing air transportation for passengers. The company serves around 92 destinations spanning 16 countries in the United States, Latin America, and the Caribbean.

Its primary customer base consists of leisure travelers and individuals visiting friends and relatives. Spirit Airlines targets value-conscious travelers who independently fund their travel expenses, competing based on overall affordability.

The company emphasizes offering unbundled base fares along with a variety of optional services. This approach allows passengers to customize their travel experience and save money by paying only for the specific options they select.

Optional services include checked and carry-on bags, wireless fidelity (Wi-Fi), advance seat assignments, priority boarding, and refreshments.

Spirit Airlines boasts a fleet of approximately 194 Airbus A320 family aircraft. Additionally, the company operates the Spirit Saver$ Club, a subscription-based loyalty program.

Members of this program gain access to unpublished, discounted fares, as well as reduced prices on baggage, hotel accommodations, rental cars, and other essential travel amenities.

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What You Know About Spirit Airlines Stock is Falling as JetBlue Merger Decision Nears

Over the past four weeks, Judge William Young in Boston has been attentively considering arguments regarding whether JetBlue Airways (JBLU) should be granted the right to acquire Spirit Airlines (SAVE) for $3.6 billion.

While Spirit shareholders approved the merger in October 2022, the U.S. Department of Justice (DOJ) sought to block it by March, citing antitrust concerns. The central argument presented by DOJ’s attorneys to U.S. District Court Judge William Young is that Spirit’s plans to raise airfares by up to 40% could result in fewer options for U.S. budget airline travelers.

This scenario, particularly in cities with limited airline presence, may leave passengers with no choice but to accept the prices set by the newly merged airline.

Closing remarks occurred on Tuesday morning between 9 and 11 a.m., leading to a 3.66% decline in Spirit shares to $15.01. Over the past two days, Spirit shares experienced fluctuations, dropping by as much as 10% to $14.50. While JetBlue shares did not see as significant decrease, they are still down by 2% to $4.70.

More on the Spirit-JetBlue Court Case

This development occurs against the backdrop of extensive speculation and behind-the-scenes negotiations, culminating in Alaska Airlines (ALK).

While the approval of regulators and potential antitrust challenges are anticipated for a deal of this magnitude, the announcement resulted in a surge in the stock prices of both airlines. Hawaiian Airlines’ stock, in particular, experienced a remarkable increase of over 170% following the news of Alaska Airlines undertaking its $900 billion debt and acquiring the airline at a 270% premium.

Spirit CEO Ted Christie expressed confidence in the strategic alignment with JetBlue, emphasizing the creation of a robust competitor to the prominent Big Four U.S. airlines. This, according to Christie, is deemed advantageous for consumers, team members, and shareholders.

He conveyed this perspective to investors during an earnings call in October, emphasizing Spirit’s readiness to make necessary strategic adjustments to effectively compete in the evolving market landscape.

Spirit Airlines Offers Buyouts to Salaried Employees to Cut Costs

In an effort to manage ongoing financial challenges, Spirit Airlines is introducing voluntary exit packages for salaried employees as part of its cost-cutting measures. The airline, grappling with diminished off-peak demand and the grounding of Airbus A320neo aircraft for engine inspections following a manufacturing defect disclosure by Pratt & Whitney, is taking steps to address capacity strains.

CEO Ted Christie, in a memo to staff on Wednesday, acknowledged the need to return to profitability and described the recent months as a test of the company’s resilience. The voluntary exit program for salaried team members is the latest measure following the airline’s previous actions, including the pause in training for new pilots and flight attendants, expense budget constraints, and network adjustments such as the plan to exit Denver.

Christie highlighted the necessity of making tough decisions to ensure the company’s financial viability. Spirit Airlines had previously implemented a similar voluntary exit program during the peak of the Covid pandemic, and based on its success, a comparable set of opportunities is being introduced to right-size the organization in alignment with current fleet and business constraints.

Meanwhile, JetBlue Airways is in the process of attempting to acquire Spirit, a move that the Justice Department has sued to block, with a trial set to conclude shortly in Boston.

Is Spirit Airlines a US company?

The company additionally offers a loyalty program called FREE SPIRIT, an A La Smarte membership, and a low-fare subscription program known as the Spirit Savers Club. Providing daily flight services in the US, as well as across Latin America and the Caribbean, Spirit has its headquarters in Miramar, Florida, USA.

Is $SAVE a good stock to buy?

The highest forecasted price target is $20.00, while the lowest projection is $7.00. The average price target indicates an -11.76% decrease from the current price of $14.96. The consensus among analysts for Spirit Airlines is a Hold, as per the ratings of 5 Wall Street analysts.

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