Spirit Airlines lost approximately $50 million in revenue as a result of the operational meltdown that caused the carrier to cancel more than 2,800 flights between July 30 and Aug. 9.
In a regulatory filing, the carrier also noted that cancellations caused its costs to increase by an estimated $30 million during the third quarter, due in large part to re-accommodation expenses for customers.
Spirit garnered widespread, unwanted attention during the first week of August as its cancellation percentage spiked to a peak of more than 60% on consecutive days.
In the regulatory filing, CEO Ted Christie reiterated apologies previously made. The airline also noted that in light of continued airport staffing shortages, Spirit will make tactical schedule reductions through the remainder of the third quarter in order to enhance network stability.
“We believe the interruption was a singular event driven by an unprecedented confluence of factors and does not reflect systemic issues,” Christie said. “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.”
Other airline stories
- Travel agency air sales backslide due to Covid
- Airport concessions struggle to keep up with bigger crowds
- Canada to require air travelers to be vaccinated
Spirit also noted in the filing that rising Covid-19 case counts have led to softer-than-expected booking trends this month and an increase in close-in cancellations. Those dynamics, coupled with the losses from flight cancellations, have led Spirit to project that its EBITDA (earnings before interest, taxes, depreciation and amortization) margin in the third quarter will fall between minus-1% and minus-8%.
The carrier had previously projected a positive third quarter EBITDA margin of 10% to 15%.
Source: Read Full Article