Spirit Airlines is privately held and venture capital has been a bit eager to start exiting the fairly successful airline.  Not because of bad weather ahead for Spirit but because venture capital does expect to cash out of investments and it’s time for this one to provide benefits to investors.  So Spirit is doing an Initial Public Offering and it doesn’t look so good.

Right now, pricing is about $12 per share and that’s $2 to $4 lower than expected.  Investors appear skittish over the IPO and likely due to oil prices.  I see this as a pretty good near term investment as the airline manages to earn good profits and has made itself stable.  It’s exceptionally low costs mean that it can weather oil prices more than many airlines who often start pulling capacity on the leisure routes that Spirit often serves.

Is this a bad sign for airlines?  No not really.  The markets are skittish in general and there really isn’t a lot of investment money out there right now anyway.  This IPO gets Spirit into the marketplace and as investors perform well on the stock, they’ll likely sell more stock in the near future and show a good result for themselves.

Filed under: Airline News by ajax