Spirit Airlines (SAVE) Post Lower Than Expected Third Quarter Loss


Spirit AirlinesSAVE’s third-quarter 2021 loss (excluding 83 cents of non-recurring items) of 69 cents per share was narrower than Zacks’ consensus estimate of a loss of 95 cents and loss of 2 , $ 32 a year ago. In the third quarter of 2019 (pre-coronavirus era), the carrier reported earnings of $ 1.32 per share.

Operating revenue of $ 922.6 million increased more than 100% year-on-year. This massive year-over-year jump reflects improving demand for air travel as cases of COVID-19 decline and the threat of the Delta variant recedes in the United States. Revenue increased 7.4% sequentially. However, quarterly revenue was down 7% from the actual numbers for Q3 2019. Revenue was also lower than Zacks’ consensus estimate of $ 935.4 million.

Spirit Airlines, Inc. Price, Consensus, and Surprise EPS

Spirit Airlines, Inc. price-consensus-eps-surprise-chart | Spirit Airlines, Inc. Quote

In the third quarter of 2021, passenger revenues, which accounted for the bulk of revenue (98.3%), rose to $ 907.2 million from just $ 392.7 million a year ago when the The impact of the coronavirus on the demand for air travel was very severe. Other income jumped 67.8% year-on-year to $ 15.3 million. Passenger revenue was down 6.8% compared to actual figures for the third quarter of 2019.

Other details

All comparisons (in%) are presented below on an annual basis.

Reflecting the increase in demand for air travel, consolidated traffic (measured in revenue passenger miles) at Spirit climbed 75.8% in the current quarter. To meet this increased demand, capacity (measured in available seat miles) increased to 54.4%. Load factor (percentage of seats occupied by passengers) increased 9.5 points to 77.6% in the third quarter of 2021. Total operating revenue per offered seat mile increased 48.7 % to 8.34 cents in the current quarter. The average yield jumped 30.5% to 10.75 cents.

Adjusted operating expenses (excluding fuel) increased 31% to $ 727.9 million. The average cost of fuel per gallon in the current quarter fell from $ 1.27 to $ 2.14 as the price of oil skyrocketed. Gallons of fuel consumed climbed 63.2% to $ 121.1 million, reflecting the use of more planes to meet optimistic air travel demand. Adjusted cost per available seat mile (ADAC) excluding fuel decreased 15.1% in the current quarter, reflecting increased capacity.

Spirit, which currently holds a Zacks Rank # 4 (Sell), ended the quarter with unrestricted cash, cash equivalents and short-term investments, as well as cash available under the carrier’s revolving credit facility. of $ 1.9 billion. Capital spending in the first nine months of 2021 was approximately $ 249 million. Expenses were primarily related to pre-delivery deposits associated with future aircraft deliveries and the purchase of four non-leased aircraft and two engines.

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The carrier expects capacity in Q4 2021 to increase 11.2% from levels achieved in Q4 2019. Fuel cost per gallon and effective tax rate in the December quarter are expected to be $ 2.54 and 22%, respectively. Fuel gallon consumption is expected to be $ 122.7 million. The Adjusted EBITDA margin for the same period is projected to be between breakeven and – 5. Adjusted operating expenses are expected to be in the range of $ 1,050 million to $ 1,060 million. For the full year, total capital expenditures are expected to be $ 290 million. Spirit plans to complete 2021, 2022 and 2023 with 173, 197 and 230 jets respectively in its fleet.

How other airlines performed

Let’s take a look at some of the other recently released earnings reports from companies in the airline industry Zacks.

American AirlinesAAL’s third-quarter 2021 loss (excluding $ 1.24 of non-recurring items) of 99 cents per share compares favorably with Zacks’ consensus estimate of a loss of $ 1.04. The quarterly loss per share was also lower than the loss of $ 5.54 recorded a year ago. Operating revenue of $ 8,969 million climbed 182.67% year over year and also topped Zacks’ consensus estimate of $ 8,926.6 million. This massive year-over-year jump reflects improving demand for air travel.

Southwest Airlines LUV suffered a loss (excluding 96 cents of one-time items) of 23 cents per share in the third quarter of 2021, lower than Zacks’ consensus estimate of a loss of 27 cents. Operating revenue of $ 4,679 million exceeded Zacks’ consensus estimate of $ 4,581.5 million.

United Airlines UAL incurred a loss (excluding $ 2.46 of non-recurring items) of $ 1.02 per share in the third quarter of 2021, lower than Zacks’ consensus estimate of a loss of 1 , $ 65. Operating revenue of $ 7,750 million exceeded Zacks’ consensus estimate of $ 7,639.7 million.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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