Spirit Airlines has reported a second quarter 2023 net loss of $2.3 million or ($0.02) per diluted share on a year-over-year increase in revenue of 4.6 percent to $1.4 billion. At June 30, 2023, the company had total liquidity of $1.5 billion.
On Thursday (August 3, 2023), Spirit Airlines reported their second quarter financial results for the period ending June 30, 2023. The carrier reported a second quarter net loss of $2.3 million or ($0.02) per diluted share on a year-over-year increase in revenue of 4.6 percent to $1.4 billion. On an adjusted basis, Spirit reported net income of $32.3 million or $0.29 per diluted share. During the second quarter, the airline’s total revenue per available seat mile (TRASM) declined 10.7 percent versus Q2 2022 to 10.30 cents, while cost per available seat mile (CASM) decreased 14.8 percent to 10.15 cents. At June 30, 2023, Spirit Airlines had cash, cash equivalents, short-term investments and liquidity available under the company’s revolving credit facility of $1.5 billion.
In Thursday’s announcement, Spirit Airlines’ President and Chief Executive Officer, Ted Christie, said,
“Unit revenue for the second quarter 2023 was strong and well above pre-Covid historical averages. However, demand for the peak summer travel period has been softer than expected, resulting in lower fare levels on the routes we serve. This summer we are comparing to a period of exceptionally strong domestic and near-field international demand in 2022, while at the same time seeing demand shift away from these regions towards long-haul international. Difficult weather and challenging Air Traffic Control initiatives are also creating a significant headwind to unit revenue.
“These trends continued throughout July and we are assuming they will continue into the fall. However, once the international summer travel season ends and kids go back to school, we anticipate that demand will shift back towards domestic. This should mean a more normal pricing and demand environment for the peak holiday travel periods in the fourth quarter.”
Also commenting on the company’s Q2 2023 results, Spirit Airlines’ Chief Financial Officer, Scott Haralson, said in part,
“Despite achieving record quarterly revenue in the second quarter 2023, productivity headwinds, primarily related to pilot constraints and NEO engine availability issues, resulted in a disappointing operating margin. With these issues as well as an acute reduction in the domestic and Latin America demand outlook, we estimate our third quarter operating margin will range between negative 5.5 percent and negative 7.5 percent.
“On a positive note, pilot attrition levels have been improving such that, assuming they stay where they are, or improve further, our growth is no longer constrained by pilots. If we weren’t burdened with the NEO engine availability issues, we could achieve full fleet utilization and more normalized margin and CASM ex-fuel production by year-end.
“Additionally, last week we reached an amendment with Airbus on our fleet order that reduces 2024 deliveries and spreads the remaining deliveries over 2025 to 2029, giving us a consistent level of deliveries for the remainder of the decade. We also upgauged all of our A319neo orders to A321neos…”
During the second quarter, Spirit Airlines took delivery of five new Airbus A320neos and one A321neo, and retired three Airbus A319ceos. At the close of the quarter, Spirit’s fleet included 198 aircraft, up 10.0 percent versus the end of the second quarter of 2022.
On March 7, 2023 the U.S. Department of Justice filed suit to block the merger of Spirit Airlines and JetBlue Airways, and the trial date has been set for October 16, 2023. Pending a successful outcome and conclusion of the regulatory processes, Spirit and JetBlue expect to close the merger transaction no later than the first half of 2024.
Miramar, Florida-based low-cost carrier Spirit Airlines (NYSE: SAVE) is committed to offering the best value in the sky with service to nearly 100 destinations in the U.S., Latin America, and the Caribbean. The airline allows customers to select and pay for only the products and services they want, something they call “À La Smarte.” Spirit also operates one of the youngest and most fuel-efficient fleets in the U.S. The carrier proudly calls their youthful fleet of aircraft their “Fit Fleet®.” Spirit Airlines operates a fleet of nearly 200 Airbus A320 Family and A320neo Family aircraft.
Source: Spirit Airlines/PRNewswire