Citi opened a 90-day downside catalyst watch on Spirit Airlines (NYSE:SAVE) in a note Tuesday, following last week's earnings and revenue miss by the low-cost carrier.
The airline posted earnings of $0.29, $0.10 worse than the analyst estimate of $0.39 on Thursday, while revenue for the quarter came in at $1.43 billion versus the consensus estimate of $1.47B.
The company noted that demand was softer than expected, with travelers now opting for long-haul international flights away from the regions SAVE serves.
Citi analysts, who maintained a Neutral rating on the stock, mentioned the demand challenges in their note.
"Long before the courts reach any verdict on the JetBlue/Spirit merger, Spirit Airlines' NEO engine challenges, its significant exposure to markets with difficult leisure comps, such as Florida, and its lack of offsetting long-haul exposure should pressure earnings," they wrote.
"Spirit’s 4Q EPS appear at risk, not only from the above factors but also as the carrier’s pilots’ deal amplifies seat mile cost pressure."