Spirit Airlines prepares for IPO
The low-cost airline hopes to raise $300 million by going public. Its debt load is considerable.
This marks a milestone of sorts. We haven't seen an airline go public in the U.S. since 2007, when Gulfstream International (GIA) hit the market, Bloomberg reports. By the way, GIA shares are now a whopping 68 cents.
Spirit gained notoriety this year when it started charging fees for carry-on bags. Yep, you read that right. A Spirit passenger will pay $45 per bag at the boarding gate, or $30 per bag when paying in advance (bags that can fit under a seat, however, get on for free).
The airline justified the fees by saying that its fares were already super-cheap. Spirit's average base fair is around $85.
Spirit has $264 million in debt, Bloomberg reported, and some of the IPO proceeds will likely go to pay that down. The company said it will retain $150 million in proceeds.
The airline mainly flies between Florida, the Caribbean and Latin America. In its filing, Spirit says it has been able to cut its operating costs significantly over the last few years. It uses an all-Airbus fleet with "high-density seating," it says, and uses less fuel per available seat mile than any other U.S. airline.
Spirit sees lots of opportunities to expand in the Caribbean and Latin American markets, and wants to grow by increasing routes and aircraft capacity.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.