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After a blocked merger, the future of Spirit Airlines is uncertain

MARY LOUISE KELLY, HOST:

For now, JetBlue is not buying Spirit Airlines. A federal judge in Massachusetts blocked the proposed purchase last month, ruling it was anti-competitive. That triggered worries about Spirit's ability to stay aloft as an independent airline based in South Florida. Tom Hudson with member station WLRN in Miami reports.

TOM HUDSON, BYLINE: When that federal judge said the two airlines could not merge, Helane Becker uttered the B word - bankruptcy.

HELANE BECKER: It was really aimed more at the judge than it was at Spirit.

HUDSON: Becker follows the airline industry for investment bank TD Cowen. She wrote an analysis concluding Spirit may be headed to bankruptcy without a merger.

BECKER: The judge decided not to throw them a lifeline. They're kind of drowning, and we just want them to be able to get to the other side, where they can thrive.

HUDSON: Judge Thomas Young based part of his rejection of the merger on protecting passengers of ultra-low-cost airlines. At the end of his decision, he wrote, quote, "to those dedicated customers of Spirit, this one's for you." But Spirit's challenge is staying independent. It has not made a profit since before the pandemic. It has about $1.5 billion in cash and credit available to it, but it also has about $1 billion of IOUs coming due next year.

BOB SWINDELL: The real challenge comes in with the debt and having to refinance that with interest rates at a higher level. That does impact their bottom line significantly.

HUDSON: Bob Swindell is the CEO of the Greater Fort Lauderdale Alliance. It's the economic development arm of Broward County. That's where Spirit is headquartered and is the largest carrier at the Fort Lauderdale Hollywood International Airport.

SWINDELL: I think there's probably some flexibility, you know, and maybe some margin they can bring back into the business, ultimately raising prices a little bit. I know that the passengers don't like to hear that.

HUDSON: Spirit did not respond to a request for comment. Its share price has been cut in half since the judge's ruling. Both Spirit and JetBlue have requested an expedited appeal to their blocked merger agreement. But financial analyst Becker thinks Spirit just needs to move on and buckle up.

BECKER: They're going to cut the least profitable routes and make sure the most profitable routes can continue to fly.

HUDSON: Already, Spirit passengers will no longer hear this.

(SOUNDBITE OF MUSIC)

UNIDENTIFIED PERSON: Welcome to Denver.

HUDSON: It cut its flights in and out of the Mile-High City last month. For NPR News, I'm Tom Hudson in Miami.

(SOUNDBITE OF JACOB MANN BIG BAND'S "DON'T FLY SPIRIT") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Tom Hudson
In a journalism career covering news from high global finance to neighborhood infrastructure, Tom Hudson is the Vice President of News and Special Correspondent for WLRN. He hosts and produces the Sunshine Economy and anchors the Florida Roundup in addition to leading the organization's news engagement strategy.Hudson was most recently the co-anchor and managing editor of Nightly Business Report on Public Television. In that position Hudson reported on topics such as Federal Reserve interest rate policy, agriculture and global trade. Prior to co-anchoring NBR, he was host and managing editor of the nationally syndicated financial television program “First Business.” He overhauled the existing program leading to a 20 percent increase in distribution in his first year with the program.Tom also reported and anchored market coverage for the groundbreaking web-based financial news service, WebFN. Beginning in 2001, WebFN was among the first live online streaming video outlets. While there he reported regularly from the Chicago Board Options Exchange, Chicago Board of Trade and the CME. Additionally, he created original business news and information programming for the investor channel of a large e-brokerage firm distributed to six large market CBS Radio stations. Before his jump to television and broadband, Tom co-anchored morning drive for the former all-news, heritage 50kw WMAQ-AM/Chicago. He spent the better part of a decade in general news as anchor, reporter, manager and talk show host in several markets covering a wide variety of stories and topics.He has served as a member of the adjunct faculty in the Journalism Department of Columbia College Chicago and has been a frequent guest on other TV and radio programs as well as a guest speaker at universities on communications, journalism and business.Tom writes a weekly column for the Miami Herald and the McClatchy-Tribune News Service. He appears regularly on KNX-AM/Los Angeles and WBBM-AM/Chicago for commentary on the economy and investment markets.While Tom was co-anchoring and managing NBR, the program was awarded the 2012 Program of Excellence Award by American Public Television. Tom also has been awarded two National Press Foundation fellowships including one for the Wharton Seminars for Business Journalists in 2006. He graduated Phi Beta Kappa from the University of Iowa and is the recipient of several professional honors and awards for his work in journalism.He is married with two boys who tend to wake up early on the weekends.