Spirit Airlines: This Fallen Airline Stock Is Down but Not Out

Over the past decade, Spirit Airlines (NYSE: SAVE) has grown from a niche carrier with just 30 aircraft into a major competitive force. Spirit's fleet recently surpassed 150 jets, making it the biggest ultra-low-cost carrier in the United States. Its expansion has played a big part in keeping average domestic airfares virtually flat since the beginning of 2011 (and down significantly after adjusting for inflation).

Initially, this rapid expansion paid off handsomely for shareholders. Spirit Airlines stock surged from an IPO price of $12 in 2011 to a peak near $85 in late 2014. However, earnings growth has been hard to come by since 2015, and margin pressures have offset its continued revenue growth.

As a result, Spirit Airlines stock lost half of its value in the five years after its late-2014 peak. By the end of 2019, it was trading for around $40. Furthermore, after air-travel demand evaporated due to the COVID-19 pandemic, it was one of the hardest-hit airline stocks. It has been trading near an all-time low recently, closing at just $8.30 on Thursday.