I’m pretty sure the release of Spirit’s monthly operating report to the bankruptcy court is going to be a regular feature here until either a) the airline exits bankruptcy protection or b) it fails. I’m not sure where I’d put my money at this point.

The October report is now out, and we aren’t going to talk much about cash position. After all, it has raised a lot of money in the reorganization, and at the end of the month it had about $650 million of unrestricted cash in the bank. Fine. But what really matters is the state of the operation and whether there’s a profitable airline buried in this mess somewhere. The answer so far is no, but this is far from the final answer.

First the good news. October was WAY better than September. You’ll recall that the filing for Chapter 11 bankruptcy protection at the end of August made a usually-weak September into a terrible, horrible, no good, very bad September. (Even worse, Spirit can’t even move to Australia to save itself….)

In September, the airline lost just over $133 million on a mere $251 million in revenue, resulting in an operating margin of -51.9 percent. That’s bad, though if we remove the loss on disposal of assets, it drops to a still-awful -48.1 percent. But in October? Well it was certainly better. Spirit lost a little over $96 million on $265 million in revenue. That left an operating margin of -35.6 percent. With almost no loss or gain on the disposal of assets in October, this is now closer to an apples to apples comparison. Bonanza!

Of course, that number looks good in context, but it is absolutely awful. There is no airline, let alone company, that can survive losing that much money on such little revenue without a swift change in fortune. But as I said, this isn’t the final answer. Let’s dig in to try and read the tea leaves just a little bit more here, because understanding where Spirit stands in its reorganization plan is important context.

I know I provided a monthly look at available seat miles (ASMs) in the September report, but we really need to look at the daily report to get a sense of how things are going, because there are cliffs here that don’t align with month-end.

Spirit Daily Scheduled ASMs

^{Data via Cirium}

As you can plainly see, after August, it’s a gentle decline in capacity that is more of a seasonal change than any sort of massive bankruptcy adjustment. Normally, we would expect to see October rebound after a slow September, but here on October 5, you can see the slow decline continues with an ever-so-slight cliff. Still, it’s not until the end of the IATA summer season on October 27 when it truly falls of a giant cliff and the “new” Spirit can finally show some progress.

What this means is that, in October, we do have fewer ASMs than we did in September despite there being one extra day, but revenue didn’t rebound as much as I’d like. I’ve now built up my revenue model better to remove canceled flight ASMs from the calculation unlike the numbers I gave in September. With that work done, unit revenue was 9.4 cents in August, 8.2 cents in September, and 9.1 cents in October.

In other words, yes, October was far better than that awful month of September, but it was still below August despite having nearly 17 percent fewer ASMs. That’s not good enough by any stretch.

Looking at costs vs September, we are still in the early stages of making cuts to improve profitability. The only significant areas of reduction in October vs September were aircraft rent dropping nearly $7 million (11.6 percent lower) and maintenance, materials, and repairs plunging 23.6 percent (about $5 million). The airline’s biggest expense — salaries, wages, and benefits — was down only 2 percent. There is a lot more coming in that bucket considering the airline will be less than half the size.

With all of that background, we have consider October as a month of transition. I was really looking forward to seeing what happened in November… but then the government shut down. I now expect November will be a noisy mess thanks to that terribleness, which is unfortunate. That being said, with such a big drop in capacity, November should be the first month we should see marked improvement. We’ll just have to wait until December to see a cleaner month.