Spirit Airlines incurs losses due to rising costs, expects Florida challenges to continue

Spirit Airlines reported a loss in the second quarter as strong travel demand and higher prices weren’t enough to beat rising costs.

Spirit announced its results less than two weeks after announcing it had agreed to sell itself to JetBlue Airways for $3.8 billion, ending a months-long bidding war between JetBlue and Frontier Airlines.

Florida-based Miramar posted a net loss of $52.4 million for the three months ended June 30. Revenue is up nearly 35% from 2019 before the pandemic to nearly $1.37 billion. Expenses are up more than 66% compared to three years ago. The fuel bill has doubled.

Passengers were paying more for airfare, however, revenue per passenger per flight was up more than 24% from 2019 to $140.61, including fees. Spirit, like other discount airlines, offers passengers low fares and charges for add-ons such as carry-on baggage and seat selection.

In the current quarter, Spirit expects pre-tax margins between negative 1% and positive 1%, citing capacity constraints in Florida. The FAA said this spring that it would add more air traffic controllers to deal with the increase in volume in the state.

Spirit, JetBlue and other major carriers have already rolled back their growth plans in an effort to avoid flight disruptions, which have been exacerbated this year by staff shortages.

However, Spirit said it expanded about 10% in flying in the second quarter compared to the same period in 2019. It plans to expand its schedule by 14% in the third quarter and 25% in the last three months of the year, compared to three months. Years ago.

The airline’s executives will face questions about how it will manage costs and travel demand for the rest of the year on a call with analysts scheduled for Wednesday at 8:30 a.m.

The higher costs affected other carriers as well, including JetBlue, which reported a second-quarter loss last week.

The entertainment-focused budget airline Sun Country on Monday posted a loss of $3.9 million despite a nearly 30% jump in revenue from 2019. Mesa Air Group, a regional airline that flies for United and other airlines, posted a loss of $10 million. For the last quarter, due to challenges from rising costs associated with a shortage of pilots.