Spirit Airlines – Playing Around

In July 2019, Spirit Airlines issued an Investor Update which explained how some of the changes it had been making to its network had made it somewhat less resilient in the face of more adverse weather challenges than had been expected. New routes, increased aircraft utilisation, lower levels of pilot reserves meant that recovery when flights were delayed or cancelled due to bad weather was tougher and passenger service suffered. Efforts would be made to play around with the business model to reverse the slide in what the carrier refers to as ‘guest experience’.

Three months later at the start of September, Category 5 Hurricane Dorian ripped through the Bahamas with speeds of up to 295km per hour, causing catastrophic damage. Spirit has now reported that the hurricane has cost it $25 million in third quarter revenues following the need to cancel 768 flights.  While every airline operating in the area has to proactively cancel flights, OAG flight status data shows that the hurricane had a greater relative impact for Spirit which cancelled 4.8% of all flights in September, compared to 2.3% for United and JetBlue, and just 1.6% for Southwest and 0.4% for Delta. As a consequence of this, as well as softer yields in the market generally, according to the airline, the carrier is now expecting revenue per ASM to be lower than the figures previously given to investors.

To view the full article, please click here