Spirit Airlines has announced an operating loss of USD 189 million for the third quarter, a substantial increase from the same quarter one year prior.
Breaking Down The Third Quarter Performance
Spirit Airlines says a disappointing outcome was recorded for the third quarter after seeing softer demand for their product and discounted fares in specific markets.
Overall, the net loss for the quarter came in at USD 158 million. With operating revenue declining by 6.3% year on year and expenses growing, it was a struggle for the carrier.
Aside from financial performance, Spirit Airlines says overall capacity grew over 2022 performance while load factor fell by 1.9%.
Spirit Airlines is a carrier impacted by the ongoing engine crisis affecting Pratt & Whitney engines on Airbus aircraft.
Problems To Continue Looking Ahead?
While the third quarter performance for the low-cost U.S. airline was poor, the expectation is that it’ll continue.
The chief financial officer flagged the continued rise of fuel prices and engine availability. These are two fundamental causes for concerns slated to impact their fourth-quarter performance.
Away from aircraft, Spirit warned that they’ll continue to see discounted fares for travel booked through the pre-Thanksgiving period.
On top of this, there’s also the expectation that they will not see the anticipated return to expected demand and pricing environment by the peak holiday season.
In an earnings release and with quotes, executives highlighted that they’ll be evaluating their future growth profile and competitive position.
Through this review, they’ll potentially view the modification of aircraft deliveries.
Additionally, there could be a view to slow down capacity growth soon to combat the current effects they’re seeing.
Comments From Spirit Airlines Executive
In addition to a softer-than-expected demand environment, we continue to be challenged by higher fuel prices and NEO engine availability issues and are expecting our margins in the fourth quarter will be lower than we reported for the third quarter 2023. We recognize this financial performance is not acceptable, and we are taking action. In addition to evaluating different strategies to drive higher revenue per departure, we have identified $100 million of structural cost reductions and are evaluating how best to capture those savings in 2024. Our team is resilient and nimble, and we are committed to returning Spirit to sustained profitability.Scott Haralson, Spirit’s Chief Financial Officer.
Looking At Spirit’s Fleet
Spirit Airlines says during the third quarter, it was able to take delivery of three new Airbus A320neo aircraft.
Away from the A320neo, five new Airbus A321neos were also delivered to the company.
As part of the new aircraft arriving, it said goodbye to four A319ceo from the previous generation.
All up, it ended the third quarter with a total of 202 aircraft in its fleet.