April 14, 2024

A Spirit Airlines aircraft

A Spirit Airlines aircraft
Photo: Brandon Bell (Getty Images)

Spirit Airlines has a lot of work ahead as it tries to figure out a future without JetBlue Airways. And that future is taking it to places including Salt Lake City, Utah, and Portland, Oregon.

Spirit will be starting up nine new routes, Travel + Leisure reports, all of them non-stop. A six-times-a-week Chicago-to-Portland trip will be the first time a low-cost carrier flies that route. The Salt Lake City flights come after JetBlue ended its service out of the city as it tries to cut costs following the collapse of the merger between the two airlines.

The two companies had once planned for a $3.8 billion merger, but a federal judge blocked the tie-up. The combination would “would likely place stronger competitive pressure on the larger airlines in the country,” the judge wrote at the time. “At the same time, however, the consumers that rely on Spirit’s unique, low-price model would likely be harmed.”

Rather than fight the decision on appeal, Spirit and JetBlue called things off. Spirit was left scrambling. JetBlue’s CEO called the whole thing a “distraction,” and Spirit’s creditors are preparing for the possibility that it might go under.

In January, the credit rating agency Fitch downgraded Spirit’s already junk bond-level default risk to a “B-” and affirmed that its outlook was negative from there. The company’s only hope, Fitch wrote in its note explaining the decision, was that “overall, Fitch expects some limited margin improvement this year as Spirit prioritizes its most profitable flying with its limited fleet base.”

Essentially: Spirit has to do more with less — or else.

Spirit stock is down more than 70% so far this year. Its debt due next September is trading for 76 cents on the dollar. Its 2026 borrowings are going for less than 50 cents on the dollar.

JetBlue stock is up almost 41% so far this year.

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