We know that airline stock Spirit Aviation Holdings (FLYY) has had a rough time over the last several months. It has tried valiantly to come back from bankruptcy, but seemingly, to no avail. And the latest news did it no favors, either: it may not be able to hold out as a going concern without an infusion of cash, and in short order. The news was catastrophic, and investors’ response was even more so. Spirit Aviation Holdings shares plunged over 42.5% in Tuesday morning’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Spirit came out of bankruptcy months ago, but bankruptcy is starting to look like a very serious problem once more. Its latest quarterly filing came with a going-concern notice, which understandably left investors shaken. Spirit has been trying to pull more interest in its airline, including adding upscale product offerings like premium economy class seating, but to little avail.
Spirit has faced an array of problems, reports note, starting with a growing oversupply in domestic flights along with a shifting consumer taste pattern. Demand for leisure travel is starting to fall off thanks to economic uncertainty, and that makes things particularly difficult for Spirit to respond. Finally, there was the matter of an engine recall that impacted most of Spirit’s planes, a move that left Spirit severely damaged.
Fighting the Current
Despite it all, Spirit is struggling in downright heroic fashion to recover. Starting November 1, it will furlough 270 pilots, and looks to demote over 100 more from “pilot” to “first officer” as it pares back its flight schedule. This is on top of the hundreds of pilots Spirit furloughed back in 2024.
Spirit’s Air Line Pilots Association chapter president Ryan Muller noted “We know how hard this news hits, and there’s no dressing that up. Spirit continues to shrink, and with it, the value of pilot seniority and Spirit careers continues to erode.” Indeed, Spirit’s ability to compete in a shrinking market is lessening, and while its move to fire and demote will save money in the short term, no company around can cut its way to profitability without maintaining or raising revenue.
Is Spirit a Buy or Sell?
Turning to Wall Street, no analysts currently have coverage of FLYY stock, so instead, we turn to the last five days of trading. These were mostly flat, at least until today’s news hit like an anvil dropped off a building onto a housefly. FLYY stock lost 48.48% in the last five days alone.
