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Spirit Airlines’ Second-Quarter Outlook Falls Below Expectations

Daniel Kim Views  

[Alpha Economy: (Chicago) Special Correspondent Paul Lee] Spirit Airlines’ second-quarter revenue outlook is not promising.

On June 6, local time, Spirit Airlines predicted that its second-quarter revenue would be weak due to sluggish domestic demand and the grounding of dozens of aircraft.

Spirit Airlines stated, “While the domestic environment is improving, it is progressing slower than the company had anticipated.”

In the first quarter, Spirit Airlines reported a loss of $1.46 per share, and total revenue decreased by 6.2%, recording $1.27 billion.

The airline had to ground several aircraft due to issues with RTX’s Pratt & Whitney geared turbofan engines, resulting in high labor costs and decreased capacity.

Additionally, it is estimated that they will hold about 25 aircraft this year, and competitors are expanding their capacity in Florida and other key markets for Spirit Airlines.

Despite strong demand and high expectations for the summer season, the airline still reported losses and was forced to implement cost-control measures.

Last month, they agreed with aircraft manufacturer Airbus to delay the delivery of all aircraft scheduled for the second quarter of 2025 and have planned a leave of absence for approximately 260 pilots.

According to LSEG data, Spirit Airlines predicted second-quarter revenue between $1.32 billion and $1.34 billion, falling short of analysts’ estimate of $1.46 billion.

On the other hand, Spirit Airlines announced that its cash level would improve to between $450 million and $550 million by 2024 due to compensation for aircraft, delayed jet delivery, and cost savings.

Spirit Airlines’ stock closed at $3.40, down $0.32.

Daniel Kim
content@viewusglobal.com

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