U.S. carrier Spirit Airlines (FLYY) has warned that it might not be able to survive as a going concern if it doesn’t quickly raise more cash.
The warning, which was made as part of the airline’s quarterly financial results, comes five months after the budget airline emerged from bankruptcy.
After cutting its debt during a corporate restructuring, Spirit Airlines tried to increase its bookings by marketing more upscale products while simultaneously cutting costs.
In July, Spirit Airlines announced plans to furlough 270 pilots this autumn as it seeks to conserve cash. However, the efforts to date appear to have been insufficient.
“Management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” said Spirit Airlines in its quarterly earnings statement.
As its financial results aren’t improving at the pace required by creditors, Spirit Airlines needs additional cash quickly.
Management said they are considering selling some aircraft, real estate assets, and airport gates to help generate needed money.
Spirit’s bankruptcy last year marked the first for a major U.S. airline since 2011.
Known for its distinctive yellow airplanes, Spirit was a budget pioneer in the U.S. aviation industry but has struggled since the onset of the Covid-19 pandemic in 2020.
A proposed acquisition of Spirit Airlines by rival JetBlue Airways (JBLU) failed due to competition concerns.
Since emerging from bankruptcy, the stock of Spirit Airlines has declined 60% to trade at $3.54 U.S. per share.
