Spirit Airlines sets IPO price range, eyes $320 million
BANGALORE/CHICAGO (Reuters) - Spirit Airlines, a private U.S. carrier specializing in low-priced flights to Latin America and the Caribbean, could raise as much as $320 million after it priced its initial public offering at $14-$16 a share.
It initially filed with U.S. regulators to raise up to $300 million in its IPO last September.
The company said it plans to use the IPO proceeds to repay debt and pay private equity firm Indigo.
Citigroup Global Markets and Morgan Stanley are lead underwriters for the offering, which will see Spirit list its shares on NASDAQ under the "SAVE" symbol.
The airline, which calls itself an "ultra low-cost" carrier, keeps ticket prices low by unbundling items and services from its base fares.
Major airlines have adopted similar structures in recent years and have managed to generate substantial ancillary revenue streams by unbundling services like bag checks.
"They're perhaps the most aggressive among U.S. carriers on ancillary fees," said Robert Mann, airline consultant at RW Mann & Co. "But at the same time in fairness, they have significantly reduced prices associated with removing services."
Spirit began operations in 1980 as Charter One, a Detroit-based charter tour operator that provided travel packages to entertainment destinations. In 1992, Charter One changed its name to Spirit Airlines and began offering flights from Detroit to Atlantic City.
The carrier added destinations throughout the 1990s and added Latin American cities starting in 2001. It now serves 40 destinations. Spirit employs 2,300 people to run its EADS Airbus EAD.PA fleet.
Spirit's pilots, represented by the Air Line Pilots Association, staged a six-day strike in June after U.S.-mediated talks failed to bridge differences with management over pay, scheduling and benefits.
The strike at Spirit was the first notable job action at a U.S. passenger airline since Northwest Airlines mechanics walked off the job in 2005. Delta Air Lines Inc (DAL.N) bought Northwest in 2008.
Florida-based Spirit operates more than 150 flights a day, but carries less than 1 percent of U.S. air passenger traffic.
(Reporting by Kyle Peterson in Chicago and Aditi Sharma in Bangalore. Editing by Ian Geoghegan and Robert MacMillan)
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |