Spirit Aviation Holdings (FLYYQ) has once again found its way onto investors' radar screens — this time under rather unusual circumstances. Reports that President Donald Trump's administration has been mulling over a possible plan for rescuing the bankrupt ultra-low-cost airline have led to an increase in trading activity. It is hardly surprising that such news has sparked speculation in FLYYQ stock, which is already in deep trouble.
Nevertheless, investors should remember the bigger picture. The airline sector has recently been dealing with a combination of rising oil prices and uneven passenger demand recovery. It is also becoming increasingly hard for smaller airlines to compete in this challenging market. As for Spirit's case, the focus lies not on the company's recovery ability, but rather on survival. The only interesting question is whether this is yet another story of failed bankruptcy restructuring in which shareholders will be left holding the bag.
