The Spirit Airlines Inc (NYSE: SAVE) stock price fell 7.14% after releasing the earnings results for the second quarter of 2023. The company revealed that its total operating revenues for the second quarter of 2023 were $1.4 billion, an increase of 4.8% compared to Q2 2022.
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However, the budget airline’s total revenue per average seat mile (ASM) declined by 10.7% to 10.30 cents compared to Q2 2022, despite 17.4% more capacity. Furthermore, total revenue per passenger flight segment for Q2 2023 fell by 8.9% to $128.03. Fare revenue per segment decreased 20.1% to $57.86 versus Q2 2022.
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The airline’s load factor was 82.9% during Q2 2023 as it dealt with numerous adverse weather events across its network during the second quarter leading to a DOT on-time performance of 64.4% and a DOT Completion Factor of 97.5%.
Spirit reported a net loss of $2.3 million for Q2 2023, translating into $0.02 net loss per diluted share. The company’s adjusted net income, excluding special items for Q2 2023, was $32.3 million.
Spirit’s President and CEO 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.”
Scott Haralson, Spirit’s Chief Financial Officer, said: “Despite achieving record quarterly revenue in the second quarter of 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.”
Spirit Airlines (SAVE) share price.
The Spirit Airlines (SAVE) share price fell 7.14% after its Q2 2023 earnings results were released.
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