Spirit Air surges after reaffirming support for JetBlue deal

Spirit Airlines Inc. said its deal with JetBlue Airways Corp. “remains in full force and effect” as the carrier explores ways to shore up its liquidity, offering investors a measure of relief after a court decision blocked the multibillion-dollar buyout.

Shares of Spirit jumped 23% as of 8:01 a.m. in premarket New York trading. The stock had plunged 62% in the three days since the federal judge’s ruling, which agreed with the US Justice Department that a tie-up would hurt consumers.

Spirit “continues to believe that a combination with JetBlue is the best opportunity to increase much needed competition and choice,” the company said Friday in a regulatory filing. It didn’t specify whether it would appeal the ruling.

The airline said in the same filing that it’s assessing options to refinance 2025 debt maturities. It’s in negotiations with aircraft parts-maker Pratt & Whitney over compensation for issues with the geared turbofan, which Spirit said represents a “significant source of liquidity over the next couple of years.”

The carrier also said fourth-quarter revenue would reach the high end of its forecast after strong bookings around the Christmas and New Years holidays.

The wide-ranging update appears designed to calm investor anxiety after the collapse of the JetBlue deal sparked concerns over how Spirit would survive. Cash has been dwindling at the budget carrier in an environment of high operating costs and flagging demand for low-cost domestic travel. Some Wall Street analysts, including those from TD Cowen and Melius Research, have said Spirit could be forced into bankruptcy reorganization or even liquidation.

Spirit pushed back Thursday, saying it was “not pursuing nor involved in a statutory restructuring.”

The company and JetBlue are reviewing the court’s decision and considering next steps, Spirit said. Reuters reported earlier that Spirit is seeking to convince JetBlue to appeal the decision to block the merger.