Rising Costs Catch Up to Spirit Airlines
Skift Take
In many ways, the airline had a solid quarter, but some potential long-term issues are starting to emerge, casting doubt on future performance.
The upward momentum of Spirit Airlines may be starting to slow down.
The airline reported a rise in cost per available seat mile, excluding fuel (CASM-ex in airlines lingo) of 2.4 percent compared to a year prior in an earnings release Wednesday, while overall revenue was somewhat soft, worrying investors. Spirit pointed to rising wages and benefits for crew members, rising fuel prices, as well as temporary setbacks from weather and a late Easter holiday.
In addition, the airline will be dealing with ongoing construction costs at one of its major hubs in Ft. Lauderdale, Florida, and seems to be struggling with weaker demand in off-peak times outside of its key routes.
Revenue for the quarter was $855.8 million compared to $704.1 million a year prior, slightly missing expectations. Revenue per available seat mile increased 4.1 percent compared to last year, missing the airline's fourth quarter guidance of 5 percent. Spirit's stock dropped over 8 percent after market open Thursd
