Spirit Airlines Posts Q1 2023 Loss, Remains Optimistic Over Year Ahead

DALLAS - Ultra-low-cost carrier (ULCC) Spirit Airlines (NK) has announced its Q1 2023 results, reporting a net loss of US$103.9m. This compares to a US$195m loss for the same period in 2022. Total operating revenues stood at US$1.3bn, up 39.5% in Q1 2022.

As travel demand has increased, the airline has enjoyed load factors of some 80.8%, up 13% from last year. Meanwhile, capacity was up almost 30% year-on-year. This was despite the numerous challenges, including the 40-hour closure of Fort Lauderdale Airport (FLL) due to flash flooding. NK was forced to cancel 600 flights and divert countless others.

Ted Christie, Spirit's President and Chief Executive Officer, said, "For the first quarter 2023, our adjusted operating margin came in better than expected, helped by lower fuel and a strong revenue per available seat mile ("TRASM") performance.

"Looking ahead to the second quarter, demand continues to be strong, and industry capacity remains constrained, both of which are beneficial for unit revenue. Our core business is solid, and the team is doing an excellent job solving for the problems within our control."

Fleet Issues

As well as weather-related issues, the airline has also encountered engine availability problems and difficulties with its Airbus A320neo family fleet. Christie explained, "We continue to be hampered by NEO engine availability and pilot attrition issues that are preventing us from ramping up aircraft utilization. The NEO engine issues should improve as the year progresses but will likely remain a drag on utilization for the rest of the year.

"Also, pilot attrition levels have improved slightly from last year, but they are still volatile, and they have not yet improved to the levels that we had hoped. Given these continued constraints, and our concerns about Air Traffic Control staffing, our capacity is heading towards the lower end of our previous full year 2023 guide of 18 to 20%."

NK took delivery of five new A320neos during Q1 2023 bringing the total number of aircraft in its fleet to 195, up 10.8% since the end of Q1 2022. It plans to add a further 26 airliners this year.

Despite the losses, the airline remains optimistic for the rest of 2023. "We expect to be profitable for the remainder of the year with margins improving each quarter. We also expect our full-year CASM ex-fuel to be around 7.0 cents. CASM ex-fuel should decline throughout the year as we improve efficiency with CASM ex-fuel in the fourth quarter 2023 being in the high 6's," Christie said.

https://airwaysmag.com/spirit-first-airbus-a321neo/

Featured Image: Spirit Airlines (NK) Airbus A320 (N642NK). Photo: Michael Rodeback/Airways