Spirit Airlines lost $36.4 million in the third quarter of 2022. This was because of storm winds, higher fuel costs, and operational problems.
The low-cost airline isn’t doing as well as it did in the three months ending September 30, 2021, when it made $14.8 million.
Spirit’s CEO, Ted Christie, said on October 27 during the company’s third-quarter earnings call that the company’s current financial results are not good. However, we think it’s best to build the network back up in a more methodical way. This will give our team time to deal with the growth and learn from it.
Spirit’s operating income for the third quarter was $1.3 billion, which is up from $923 million for the same quarter in 2021. The revenue per passenger flight segment went up from $110.91 to $134.59, and the airline doesn’t see any signs that the leisure travel market will slow down.
“The business did well in spite of a number of problems during the third quarter of 2022,” says Christie. “These problems included much higher fuel costs, Hurricane Ian, and a lack of space in Florida.” “These headwinds were less of a problem because there was strong demand and good revenue management, as well as good operational reliability and overall cost management.”
Amid slow recovery, Spirit Airlines
Hurricane Ian caused Spirit, which is based in Miramar, Florida, to cancel about 550 flights in September and 400 flights in October, the company says. The company thinks that the problems caused by the disaster cost them $10 million, which was split evenly between the third and fourth quarters.
In the wake of the hurricane, the company says that bookings for flights to and from Florida are “softening.” They estimate that their fourth-quarter revenue will drop by another $3 million to $5 million.
Spirit has in the past blamed its slow recovery from the COVID-19 pandemic on a lack of air traffic control staff in Florida. On October 27, Christie says that Spirit’s planes are still not being used enough and that the company is having trouble getting its schedule up to speed.
“We still have infrastructure problems that keep us from getting back to normal margins and full use,” says Christie. “One of the biggest problems is that there aren’t enough flights to and from Florida.”
Spirit is still working on the problem with the Federal Aviation Administration, but Christie says they think it will take more than a year to fix and will “limit network optimization.”
Spirit’s shareholders voted on October 19 to let rival low-cost airline JetBlue buy the company. This is “an important step forward on our way to closing a combination that will create a compelling low-fare competitor to the dominant US carriers,” says Christie. The deal won’t go through until the federal government gives its approval.
Also in the third quarter, Spirit got four new Airbus A320neos. This brought the airline’s total number of planes to 184.
As of September 30, Spirit had $1.3 billion in cash, cash equivalents, and short-term investments as of September 30. This was down from $1.9 billion on the same date in 2021.
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