February 28, 2024

A Spirit Airlines plane in the air.

Photo: Daniel Slim/AFP via Getty Images (Getty Images)

The low-price carrier Spirit Airlines is in trouble after the US government said it can’t merge with JetBlue Airlines for antitrust reasons. It’s not profitable. Its onetime prospective corporate sibling is leaving it hanging out to dry on the question of appealing the merger blockage. It has a bunch of debt coming due next year. So why is its stock price up more than 20% during Friday (Jan. 19) trading?

In an update to investors, a single sentence is doing a bunch to lift investor expectations: “Adjusted operating margin guidance for the fourth quarter 2023 is positively revised 450 basis points from negative 15 to 19 percent to negative 12 to 13 percent.” Huh?

In plain-speak, that means it’s losing slightly less money than it expected. The Christmas and New Year’s travel season was good to Spirit—“strong” is the word the company used—and jet fuel became a little cheaper; that means the company is confident in telling the market it won’t be losing quite as much money as it previously thought it would in the fourth quarter. That’s not great news, but at this point anything that’s not bad news sounds pretty good.

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