(Reuters) – Shares Spirit Airlines (NYSE:) surged as much as 46% on Monday after the ultra-low-cost carrier reached an agreement with its credit card company to extend its debt refinancing deadline by two months, to December 23.
The deal with the U.S. Bank National Association gives Spirit some room to refinance its $1.1 billion in loyalty bonds that mature next year. The previous refinancing deadline was October 21.
The Florida-based company said Friday that it has fully drawn down its $300 million revolving credit facility and expects to end this year with more than $1 billion in liquidity.
“Spirit needs to address debt maturities and the sizing of its fixed cost structure, and it is still unclear whether this can be achieved with or without Chapter 11,” said Savanthi Syth, an analyst at Raymond James.
Spirit, which has not reported profits in five of the last six quarters, revealed plans to use premium travel in July to ease cost pressures and boost profits. This marked a major departure from the simple and very cheap model.
Spirit shares are down about 91% this year, while the passenger airline index is up 33%.
