Miramar-based low-cost airline Spirit Airlines Inc. (SAVE) experienced a decline of 1.7% in its stock in premarket trade on Thursday. The company disclosed a net loss of $2.349 million, or 2 cents per share, for the quarter. This figure is narrower than the loss of $53.4 million, or 48 cents per share, reported in the same period last year. However, the adjusted per-share earnings of 29 cents fell short of the FactSet consensus of 39 cents.
While revenue for the quarter increased to $1.432 billion from $1.367 billion a year ago, it still missed the FactSet consensus of $1.473 billion. Chief Executive Ted Christie attributed this shortfall to softer-than-expected demand for peak summer travel. Consequently, fare levels on the routes serviced by Spirit Airlines decreased. Christie explained that the comparison to the exceptionally strong demand in 2022, coupled with a shift in demand away from domestic and near-field international destinations toward long-haul international flights, contributed to these results. The company also faced challenges due to adverse weather conditions and Air Traffic Control initiatives affecting unit revenue.
These trends persisted throughout July and are expected to continue into the fall. However, Christie anticipates a shift back towards domestic travel once the international summer travel season concludes and children return to school. As a result, he believes the peak holiday travel periods in the fourth quarter will witness a more normal pricing and demand environment.
Since the beginning of the year, Spirit Airlines’ stock has fallen by 12%, while the S&P 500 has gained 17.6%.