Key Takeaways
- Spirit Airlines warned that its second-quarter loss would be more than expected, and revenue would fall short of its previous outlook.
- The company blamed the worse numbers on less-than-anticipated non-ticket revenue.
- The news sent Spirit Airlines shares to an all-time low.
Shares of Spirit Airlines (SAVE) fell to an all-time low Wednesday, a day after the discount carrier warned that its second-quarter loss and revenue would be worse than it had previously expected because non-ticket income came up short.
The airline wrote in a regulatory filing Tuesday that it expects an adjusted operating loss of $160 million to $173 million in the second quarter, more than its earlier forecast of $121 million to $145 million. It sees revenue of $1.28 billion, down from its previous outlook of $1.32 billion to $1.34 billion.
‘Changes in the Competitive Marketplace’
Spirit explained that non-ticket revenue, which includes items such as baggage fees and seat choices, “underperformed the Company’s initial estimate,” coming in at $64 per passenger. It said that was “several dollars” less than anticipated. The carrier attributed that to “ancillary pricing due to changes in the competitive marketplace.”
Spirit added that it believes second-quarter ticket revenue will be in line with its prior guidance.
The company noted that it has started to “execute on its transformation plan to better align with the current market dynamics,” which it feels will increase total revenue per passenger segment over time.
Spirit Airlines shares fell nearly 11% as of about noon ET Wednesday to $2.82, an all-time low. They have lost more than 80% of their value this year.
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