Spirit Airlines recorded a $103.9 million or 95 cents a share loss in the first quarter of 2023 (Q1 2023).
"Excluding special items, adjusted net loss for the first quarter 2023 was $89.4 million, or an adjusted net loss of $0.82 per diluted share," the company said, where it gave a pre-tax loss of $141.6 million and a pre-tax margin of negative 10.5%. The adjusted pre-tax loss for the first quarter was $120.6 million, meaning an adjusted pre-tax margin of minus 8.9%.
The carrier's operating revenue for the period was $1.35bn, a 39% year-on-year increase, with total revenue per available seat mile (TRASM) at 10.22 cents, up 23.9% on 12.7% more capacity and "in-line with expectations provided in mid-March 2023", according to Spirit.
The carrier said in results announcement that "total revenue per passenger flight segment for the first quarter 2023 increased 12% to $127.36", a rise that was in part down to pricier tickets.
"Compared to the first quarter 2022, fare revenue per segment increased 16.8% to $57.45 and non-ticket revenue per
segment increased 8.3% to $69.913," the company added.
Spirit ended the period with unrestricted cash and cash equivalents, short-term investment securities and liquidity available under the company's revolving credit facility of $1.7bn, after reporting $86 million in capital expenditures for the period, which it said were "primarily related to net outflows of aircraft pre-delivery deposits, expenditures related to the building of Spirit's new headquarters campus in Dania Beach, Florida and spare parts, including one spare engine".
Operating costs climbed by almost 25% to over $1.4bn in Q1 2023. "Compared to the first quarter 2022, these increases were primarily driven by increased flight volume, additional aircraft, higher fuel prices and inflationary wage pressures," Spirit said, adding that, despite the rise, the outlay turned out to be "better than expected".
"Looking ahead to the second quarter, demand continues to be strong and industry capacity remains constrained, both of which are beneficial for unit revenue," said president and chief executive Ted Christie.
Spirit expects that the rest of the year will see lower fuel prices, which would mean better prospects for its margins but for problems with engine availability and pilot recruitment.
"For the second quarter 2023, we estimate our operating margin will range between 4.5 to 6.5 %," said chief financial officer Scott Haralson.
"In this demand environment, and with a declining fuel price in the second quarter of this year, the business at full utilisation should be producing double digit operating margins. However, we continue to be hampered by neo engine availability and pilot attrition issues that are preventing us from ramping up aircraft utilisation," Haralson warned.
The carrier took delivery of five A320 neo airplanes during the quarter, leaving it with 195 aircraft on March 31.
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