In an investor update to its third quarter guidance, Spirit Airlines has warned that it experienced “significant irregular operations due to a series of overlapping challenges, primarily adverse weather and airport staffing shortages, leading to severe crew dislocations”. Spirit cancelled 2,826 flights during the quarter and expects to book negative revenue of approximately $50 million.
Spirit has also warned of “softer-than-expected” booking trends for the quarter and some amount of “short-term brand impact from the irregular operations”. These actions are expected to drive an additional $80 to $100 million of negative revenue impact during the third quarter. Spirit Airlines now estimates its third quarter 2021 total operating revenues will be between $885 to $955 million.
As a result of the irregular operations, the company incurred additional expenses. Spirit estimates its third quarter 2021 Adjusted operating expenses will range between $1,030 to $1,040 million.
The Company is revising its third quarter Adjusted EBITDA Margin guidance from positive 10% to 15% to negative 8.0% to negative 1.0% which assumes a fuel price per gallon of $2.19.
“On behalf of our entire leadership team, we offer an apology to everyone impacted throughout the course of this event,” said Ted Christie, Spirit’s President and Chief Executive Officer. “We believe the interruption was a singular event driven by an unprecedented confluence of factors and does not reflect systemic issues. Over the past few years, we have made investments to be one of the most efficient and reliable airlines in the U.S. industry, and we are committed to taking the steps necessary to make sure we maintain that standard.”