Spirit Airlines

ISS urges Spirit shareholders to vote for Frontier offer

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June 25 (Reuters) – Proxy advisory firm Institutional Shareholder Services Inc (ISS) has urged shareholders of Spirit Airlines Inc (SAVE.N) to vote for a proposed merger with Frontier Group Holdings Inc (ULCC.O).

“On balance, support for the merger with Frontier on the revised terms is warranted,” the proxy advisory firm said in a report published late Friday and made public on Saturday.

Spirit is the subject of a bidding war between Frontier and JetBlue Airways Corp (JBLU.O).

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The proxy advisory firm last month asked Spirit shareholders to reject Frontier’s offer, saying JetBlue’s competing offer of $30 a share is superior from a financial standpoint. read more

Earlier this month, New York-based JetBlue sweetened its offer for Spirit by $2 to $33.50 per share in cash. read more

Spirit Airlines on Friday said that Frontier raised its cash offer by $2 per share to buy the airline and urged its shareholders to back a merger deal with Frontier at a meeting next week. read more

Spirit shareholders are due to vote on the merger deal with Frontier on June 30.

ISS also said the current offer from Frontier appears preferable as it matches the $2.00 increase in JetBlue’s offer price and also provides a higher prepayment of $2.22 per share compared to $1.50 per share from JetBlue.

Denver-based Frontier also increased its reverse termination fee to Spirit by $100 million to $350 million.

Florida-based Spirit has repeatedly rejected JetBlue’s offer, saying it has a low likelihood of winning approval from U.S. regulators.

However, JetBlue has been persistent and said it continued to believe its proposal was superior to Frontier’s adding that it will “more thoroughly” review and assess the revised terms of Frontier’s proposal.

(This story corrects story link in paragraph 5)

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Reporting by Mrinmay Dey in Bengaluru
Editing by Alistair Bell

Our Standards: The Thomson Reuters Trust Principles.

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Wall St rises on gains in banks, strong retail sales data

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Summary
Companies

Walmart slides after cutting earnings forecast
April retail sales rise in line with estimates
S&P 500 +2.02%, Nasdaq +2.76%, Dow +1.34%

May 17 (Reuters) – Wall Street finished sharply higher on Tuesday, lifted by Apple, Tesla and other megacap growth stocks after strong retail sales in April eased worries about slowing economic growth.

Ten of the 11 major S&P sector indexes advanced, with financials (.SPSY), materials (.SPLRCM), consumer discretionary (.SPLRCD) and technology (.SPLRCT) all gaining more than 2%.

Investors were cheered by data showing U.S. retail sales increased 0.9% in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants. read more

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Recently punished shares of Microsoft Corp (MSFT.O), Apple Inc (AAPL.O), Tesla Inc (TSLA.O) and Amazon (AMZN.O) gained between 2% and 5.1%, driving the S&P 500 and the Nasdaq higher.

Tuesday’s broad rally followed weeks of selling on the U.S. stock market that last week saw the S&P 500 sink to its lowest level since March 2021.

“The largest pockets of stocks that investors tend to buy have been essentially beaten up. They’re either in correction or bear market territory,” said Sylvia Jablonski, chief investment officer of Defiance ETF. “I think investors are looking at these opportunities to buy on the dip, and I suspect that today is a good day to do that.”

The S&P 500 Banks index (.SPXBK) jumped 3.8%, with Citigroup (C.N) climbing almost 8% after Warren Buffett’s Berkshire Hathaway (BRKa.N) disclosed a nearly $3 billion investment in the U.S. lender.

Another set of economic data showed industrial production accelerated 1.1% last month, higher than estimates of 0.5%, and faster than a 0.9% advance in March. read more

“This is consistent with continued economic growth in the second quarter and not a recession underway,” said Bill Adams, chief economist for Comerica Bank in Dallas.

The U.S. Federal Reserve will “keep pushing” to tighten U.S. monetary policy until it is clear inflation is declining, Fed Chair Jerome Powell said at an event on Tuesday. read more

Traders are pricing in an 85% chance of a 50-basis point rate hike in June.

The S&P 500 climbed 2.02% to end the session at 4,088.85 points.

Apple logo is seen in this illustration taken March 1, 2022. REUTERS/Dado Ruvic/Illustration

The Nasdaq gained 2.76% to 11,984.52 points, while Dow Jones Industrial Average rose 1.34% to 32,654.59 points.

S&P 500’s busiest trades

Underscoring Wall Street’s recent volatility, the S&P 500 has gained or lost 2% or more in a session some 39 times so far in 2022, compared to 24 times in all of 2021.

Walmart Inc (WMT.N) tumbled 11.4% after the retail giant cut its annual profit forecast, signaling a hit to its margins. That marked the biggest one-day percentage drop for Walmart’s stock since 1987. read more

Retailers Costco (COST.O), Target (TGT.N) and Dollar Tree (DLTR.O) fell between 0.8% and 3.2%.

United Airlines Holdings Inc (UAL.O) gained 7.9% after the carrier lifted its current-quarter revenue forecast, boosting shares of Delta Air (DAL.N), American Airlines (AAL.O) and Spirit Airlines (SAVE.N). read more

A positive first-quarter earnings season has been overshadowed by worries about the conflict in Ukraine, soaring inflation, COVID-19 lockdowns in China and aggressive policy tightening by central banks.

The S&P 500 is down about 14% so far in 2022, and the Nasdaq is off around 23%, hit by tumbling growth stocks.

U.S.-listed Chinese stocks jumped on hopes that China will ease its crackdown on the technology sector. read more

Advancing issues outnumbered declining ones on the NYSE by a 2.92-to-1 ratio; on Nasdaq, a 3.19-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 24 new highs and 126 new lows.

Volume on U.S. exchanges was 12.0 billion shares, compared with a 13.3 billion average over the last 20 trading days.

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Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

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Frontier Airlines I.P.O. Signals a Travel Industry Recovery

“We just believe we’ve got more embedded growth, we’ve also got lower costs, and we believe we’ve got a great brand that positions us well in the low-fare space,” Mr. Biffle said.

The airline claims it is unique among low-cost airlines. While Spirit tends to serve more-crowded markets and Allegiant Air less-crowded ones, Frontier is more evenly distributed. The airline said it kept planes moving for more hours every day than most other major airlines and offers some flights only a few days a week, allowing it to serve smaller cities. In addition to Denver, Frontier has a big presence in Orlando, Fla., and Las Vegas.

Frontier also claims to be more fuel-efficient than its peers, which it hopes will appeal to environmentally conscious consumers.

The airline earned $251 million in 2019 before losing nearly as much last year. It has about $1 billion in cash or cash equivalents and employs about 5,000 people.

Deregulation of the U.S. airline industry in 1978 paved the way for the growth of low-cost carriers, which tend to operate direct, point-to-point flights, often to secondary airports in major cities — an approach pioneered by Southwest. That strategy makes it easier to put planes and crews to efficient use, allowing the airlines to offer relatively low fares. The more traditional hub-and-spoke model used by American, United and Delta is more expensive to maintain but easier to grow once established.

The ultra-low-cost model is a more recent creation, one that Europe’s Ryanair is often credited with popularizing. Companies that use it are much more aggressive about keeping costs low and maximizing revenue. These airlines tend to use their planes an hour or two more each day than other airlines and tend to cram more and smaller seats into planes. They also charge for lots of services that even many conventional discount airlines include in the ticket price, such as seat selection or printed boarding passes.

But larger airlines are unlikely to easily cede ground to Frontier and its ilk. In March, for example, United, which operates the most flights at the Denver airport, announced plans to add dozens of nonstop flights between small Midwestern cities and a handful of tourist destinations. Even before the pandemic, United and other large airlines were copying ultra-low-cost companies by offering lower fares and charging for more services.

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