Breeze airline stock symbol10/2/2023 The company has already grown revenues by 44% above Q4'19 levels in the last quarter, to $1.4 billion. The airline forecasts growing ASMs by over 20% in 2023 with only a 13% boost starting in Q1. Spirit Airlines has jumped in with aggressive capacity growth to take advantage of domestic travel demand and legacy airlines' slow return to 2019 capacity levels. The airline is forecast to produce a $0.61 profit this year before a surge to an EPS of $1.79 in 2024. For Q4'22, the airline reported an EPS of $0.12, and the airline is expected to generate far more profits in the years ahead with multiple catalysts on lowering costs after a big revenue gain.Īs with other airlines, Spirit Airlines started 2022 losing money and now the company is on the path to strong profits. The best part of any deal risk is that Spirit Airlines is likely worth just as much as a standalone airline. We anticipate hearing from the DOJ in the next 30 days or so and that's really all we have to say on that topic for now. We announced in December 2022 that Spirit and JetBlue had certified substantial compliance with the DOJ's second request and are now waiting to see whether the DOJ filed suit to block the deal or allows us to proceed. On the recent Q4'22 earnings call, CEO Ted Christie expects the DOJ to provide an update in the next month: Regardless, media outlets are reporting an expectation for the DOJ to file a lawsuit to block the deal. The courts have blocked all but one case brought by the DOJ in the last year. The Biden DOJ has failed miserably in blocking deals on an antitrust basis. Consumers could be forced to pay higher fares, but at the same time, ULCCs like Frontier will likely step up and replace any disappearance of low fares from the Spirit Airlines brand. The biggest concern is the consumer harm of moving to the higher-costing JetBlue brand. Right now, JetBlue and Spirit compete with Alaska Air Group ( ALK) and Frontier Group ( ULCC) for the low-cost passenger, and this combination limits some of this competition. The combined companies don't compare anywhere close to the legacy airlines, but the DOJ will likely focus on the competitive landscape for airfares outside of the Big 4. The airline business is booming with high airfares, so one has to question whether the government will be too excited to eliminate an ultra-low-cost-carrier from the market. The biggest question remains whether the DOJ will block the merger. Shareholders will see a nearly 60% upside with no pricing risk due to the cash offer. The stock currently trades below $19.50 and the deal price still offers shareholders a cash payment of $31.00 plus the $0.10 monthly payment to wait for the deal closing. JetBlue paid this first fee to Spirit Airlines holders on January 31. The deal also offers an additional prepayment fee of $0.10 per month starting in January 2023 through closing. The $3.8 billion deal price included a $2.50 cash prepayment paid by JetBlue on the merger approval by Spirit shareholders back on October 18. My investment thesis remains Bullish on the airline stock, as SAVE investors now collect $0.10 a month to wait on the deal close.īack in July, Spirit Airlines agreed to a merger deal with JetBlue at a price of $33.50 per share in cash. The biggest question remains whether the Department of Justice will file a lawsuit to block the deal. ( NYSE: SAVE) shareholders have to decide on whether to wait around for the JetBlue Airways Corporation ( JBLU) merger cash. As the airline industry hits a boom phase, Spirit Airlines, Inc.
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