What happened

Shares of Spirit Airlines (SAVE 2.21%) fell more than 8% on Thursday morning following the discount airline's fourth-quarter earnings announcement. The results, as expected, were terrible, but investors were also disappointed by the tepid forecast Spirit provided for the first half of 2021.

So what

After markets closed Wednesday, Spirit reported a fourth-quarter loss of $1.61 per share on revenue of $498.5 million, falling short of Wall Street expectations for a $1.43 loss on revenue of $516 million.

Airlines have been hit hard by the pandemic, and we knew the results would be bad. But Spirit underperformed expectations due to higher interest expense and lower yields on the flights that are happening. The company also said it doesn't see a rebound anytime soon, and it expects first-quarter capacity to be down 17% year over year.

A Spirit plane comes in for a landing.

Image source: Spirit Airlines.

Expenses will also be an issue this year. Spirit deferred about $25 million in costly heavy maintenance during the crisis last year, which will now have to be accounted for in 2021.

CEO Ted Christie said in a statement: "Soft demand driven by pandemic-related concerns continues to have a significant impact on our operating results. However, our leading low-cost structure remains a key advantage and positions us well to compete in this environment and beyond. While the road to recovery is anticipated to be choppy, we are confident we will be among the first U.S. carriers to return to profitability."

Now what

It's Christie's comment about Spirit being among the first U.S. carriers to return to profitability that is likely responsible for the bulk of the reaction on Thursday. Investors heading into the release were likely hoping for a more upbeat tone from the company about the first half.

At least two Wall Street research shops, Seaport Global and Vertical Research, downgraded the shares to a hold from a buy following the release. Seaport analyst Daniel McKenzie in his downgrade noted that Spirit shares are now up more than 350% from their 52-week low, limiting the potential for additional upside for now.

I still believe that Spirit -- thanks to its industry-low cost structure and a network set up to cater to leisure travelers, who will likely be the first to fly again -- is positioned well to lead the way through a recovery. But the earnings release and forecast were a reminder that there are no post-pandemic shortcuts, and a recovery will take time.

Spirit ended the year with $1.9 billion in total liquidity, and burned through just $1.8 million per day in the fourth quarter. The airline is in good position to survive and thrive once traffic does return. But for now, investors appear unwilling to climb on board after hearing from management that there could be an extended wait before takeoff.