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Spirit Airlines (SAVE) earnings Q2 2022

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Spirit Airlines planes on the tarmac on the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Spirit Airlines reported a second-quarter loss as strong travel demand and better fares weren’t enough to beat a surge in costs.

Spirit reported results lower than two weeks after it announced it agreed to sell itself to JetBlue Airways for $3.8 billion, ending a monthslong bidding war for Spirit between JetBlue and Frontier Airlines.

Miramar, Florida-based Spirit posted a net lack of $52.4 million for the three months ended June 30. Revenue rose nearly 35% from pre-pandemic 2019 to almost $1.37 billion. Expenses soared greater than 66% compared with three years ago. Its fuel bill greater than doubled.

Passengers were paying more to fly, nonetheless, with revenue per passenger, per flight up greater than 24% from 2019 to $140.61, including fees. Spirit, like other discount carriers, offers travelers low fares and charges fees for add-ons like cabin baggage and seat selection.

In the present quarter, Spirit expects pretax margins between negative 1% and positive 1%, citing capability constraints in Florida. The Federal Aviation Administration this spring said it will add more air traffic controllers to handle a surge in volume within the state.

Spirit, JetBlue and other major carriers have already dialed back their growth plans in an effort to avoid flight disruptions, which were made worse this yr by staffing shortages.

Still, Spirit said it expanded flying almost 10% within the second quarter compared with the identical period of 2019. It plans to grow its schedule by 14% within the third quarter and 25% within the last three months of the yr, compared with three years earlier.

The airline’s executives will face questions on how it’s going to manage costs and travel demand for the remaining of the yr on a call with analysts scheduled for Wednesday at 8:30 a.m.

Higher costs have hit other carriers as well, including JetBlue, which reported a second-quarter loss last week.

Low-cost and leisure-focused carrier Sun Country on Monday posted a $3.9 million loss despite a virtually 30% jump in revenue compared with 2019. And Mesa Air Group, a regional airline that flies for United and other carriers, posted a $10 million loss for the last quarter, as a result of challenges from higher costs related to the pilot shortages.

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