Amid wide Wall Street speculation that a trip to bankruptcy court is possible after a judge blocked its takeover by JetBlue Airways, South Florida-based Spirit Airlines moved Friday to reverse the public narrative about its financial fortunes by issuing a positive forecast about its forthcoming financial results for the fourth quarter of 2023.

The company also says it is not contemplating a bankruptcy filing.

“Spirit is not pursuing nor involved in a statutory restructuring,” an airline spokesperson said in an emailed statement late Thursday to the South Florida Sun Sentinel.

Early Friday, stock for Miramar-based Spirit jumped by more than 20% to more than $7 after the airline released an “investor update”  that reported strong bookings over the Christmas and New Year’s holidays. The airline also said it had access to more than $1 billion in cash at the end of 2023 and lower-than-expected expenses for the fourth quarter.

Spirit is the busiest airline at Fort Lauderdale-Hollywood International Airport, followed closely by JetBlue. Both airlines also serve Miami International Airport and Palm Beach International Airport. The airlines’ discount fares have helped draw millions of tourists to Florida annually.

But last year, the Biden Administration sued the airlines to halt their proposed merger, alleging potential harm to consumers. After a lengthy trial, a federal judge in Boston sided with the government on Tuesday.

JetBlue announced in a statement late Friday that the two airlines filed a joint notice of appeal to the U.S. Court of Appeals for the First Circuit, “consistent with the requirements of the merger agreement.”

Still, the prospect of Spirit having to fly alone amid financial difficulties raised questions on Wall Street about its long-term survival.

On Friday, Spirit management sought to clarify its financial status with a public statement filed with the Securities and Exchange Commission.

“As of December 31, 2023, Spirit had $1.3 billion of liquidity, including unrestricted cash and cash equivalents, short-term investment securities and $300 million of liquidity under the Company’s revolving credit facility,” Spirit said in the update,

“During the fourth quarter, the Company took several steps to shore up its liquidity to allow it time to make the necessary strategic shifts to enable the Company to compete effectively in the current demand backdrop and to return the business to profitability,” the filing added.

Spirit cautioned that the report is based on current estimates and “not a guarantee of future performance.” Management has scheduled a Feb. 8 conference call to discuss its 2023 results.

Appeal filed

The two airlines’ statement late Friday evening did not provide further information about the appeal of the judge’s ruling that blocked the takeover.

The companies had 30 days to appeal and jointly said they disagreed with the decision. But industry analysts speculated that JetBlue’s financial condition, which like Spirit’s has been diminished by extended losses, would be better off without the takeover.

Neither company immediately responded Friday to emailed requests for comment before the appeal announcement.

But in its filing early Friday, Spirit had said the merger deal remains alive.

“The Merger Agreement between Spirit and JetBlue and Sundown Acquisition Corp., wholly owned subsidiary of JetBlue, dated July 28, 2022 remains in full force and effect,” it said.

Bad publicity depressed stock

Young’s ruling was immediately followed by speculation from influential industry analysts that a bankruptcy filing looms as an option for Spirit to reorganize its flagging finances. Analyst notes to brokerage clients included downgrades of Spirit’s stock, which suffered steep declines this week after the judge issued his opinion.

Spirit last reported an annual profit in 2019. But the airline has accumulated more than $1.6 billion in losses since that point, according to The Associated Press. Last fall, when Spirit announced a heavy round of third-quarter losses, management said it slowed the deliveries of new planes through the end of this decade as well as capacity growth “in the near term.”

Spirit also has been forced to adjust its future capacity downward after noting it would have to ground more than 10% of its fleet of Airbus jets this year so the planes’ Pratt & Whitney engines could be inspected for possible manufacturing defects.

In the Friday filing with the SEC, Spirit said that talks with Pratt & Whitney about compensation “have progressed considerably since October, and while no agreement has been reached to date, the company believes the amount of compensation it will receive will be a significant source of liquidity over the next couple of years.”

The airline also noted that it completed sale-leaseback transactions for 20 of its planes, resulting in the repayment of approximately $325 million in debt and the raising of another $320 million in cash. This month, the filing said, the company completed similar transactions for another five planes, cutting debt by $140 million on those aircraft and raising $99 million.

“In total, these transactions resulted in net cash proceeds to the company of approximately $419 million,” the company said.

Spirit also said it is “assessing options” to refinance at least $1.1 billion in debt that comes due in 2025.

Staff writer Angie DiMichele contributed to this report, which was supplemented by Information from The Associated Press.