Spirit Airlines Struggles To Gain Momentum

Spirit Airlines forecasts a wider quarterly loss due to revenue falling short of expectations, projecting an adjusted loss of $160 to $173 million for the quarter that ended June 30. This is an increase from a prior estimate of no more than $145 million, with expected sales of $1.28 billion, down from the $1.32 billion forecast.

Non-ticket revenue per passenger was also lower than anticipated. The airline is struggling with an oversupplied U.S. market, an engine recall, and the aftermath of a blocked acquisition by JetBlue Airways. Shares fell by over 9% in late-morning trading on Wednesday following the announcement the night before. Spirit is shifting its ticket sales strategy to bundle services, aiming to improve overall revenue per passenger in the long term.

In March, Spirit Airlines announced it was expanding its operations by adding five new nonstop flights from San Diego International Airport, launching routes to Baltimore, Houston, Portland, Sacramento, and Salt Lake City this summer. Flights to Baltimore will occur three times daily, with other cities offering daily service. Spirit also became the first low-cost carrier to connect Portland and Chicago with six weekly flights.

Additionally, Spirit introduced daily services from Boston to Detroit and Pittsburgh, as well as routes connecting Portland, Columbus, and Salt Lake City to various destinations. This expansion follows the termination of its merger agreement with JetBlue due to regulatory challenges, which Spirit’s CEO Ted Christie stated was disappointing, as it could have saved consumers hundreds of millions.

Moreover, in May, Spirit eliminated change and cancellation fees to attract more customers, following Frontier Airlines’ lead. Previously, fees ranged from $69 to $119, depending on how close to departure the change was made. There were no fees for changes or cancellations within 24 hours of booking. The airline quietly updated its website to reflect this change, stating that both cancellation and change fees were gone for everyone. Despite this move, Spirit still faced challenges that deterred customers from booking flights with them.