Spirit Airlines reported on Wednesday a second quarter net loss of $144.4 million or $(1.81) per diluted share. The carrier’s second quarter revenue was $138.5 million versus $1.01 billion for the second quarter of 2019.
Today (July 22, 2020), Spirit Airlines announced a second quarter 2020 net loss of $144.4 million or $91.81) per diluted share. The carrier reported an adjusted net loss of $(285.8) million or $(3.59) per share. Spirit Airlines’ second quarter revenue was $138.5 million compared to $1.01 billion during the same quarter last year. Capacity for the second quarter was down 83.2 percent compared to the same period last year. However, due to rapid network adjustments, Spirit was able to increase their load factors from 17.9 percent in April to 79.1 percent in June. For July, August, and September, the airline is expecting capacity to be down 18, 35, and 45 percent compared to last year, respectively, or down around 32 percent for the quarter year-over-year. In Wednesday’s announcement, Spirit Airlines’ President and Chief Executive Officer, Ted Christie said,
“The COVID-19 pandemic negatively impacted our second quarter results. However, we are encouraged by our June results and believe they illustrate that when leisure travel demand rebounds and stabilizes, our leading low-cost structure positions us well to be among the first to return to profitability. We increased our schedule in June as a result of encouraging, albeit tenuous, signs of demand improving. This worked out for us well. The favorable dynamics of our low-cost structure, a slight rebound in demand in June, and an uptick in forward bookings for July resulted in favorable cash dynamics for the month of June. In fact, if you exclude an early principal payment of $50 million related to our aircraft deferral agreement and extension of our pre-delivery deposit facility, on an average daily cash basis, we were break-even for the month of June.
“For our Guests who are ready to travel again, we are pleased to welcome them back. We are taking purposeful steps to provide a safe and healthy experience for our Guests and Team Members. I am proud of how our entire team has stepped up in response to COVID-19, adapting to enhanced cleaning processes and changes in operational procedures, maintaining productivity amidst a changing work environment, connecting with our Guests in innovative ways, and proactively cutting costs and taking actions to preserve liquidity.”
During the second quarter, Spirit’s GAAP expenses decreased year-over-year by 61.3 percent to $328.9 million (including $151.9 million in special items), while adjusted expenses decreased 43.3 percent to $480.8 million. This year, through the end of the second quarter, the carrier took delivery of nine new Airbus A320neos, three of which were delivered in the second quarter. Two of the aircraft delivered in Q2 were debt-financed, while one was secured under a direct operating lease. Spirit Airlines ended the second quarter with 154 aircraft and has deferred delivery of future aircraft under an agreement with Airbus. The company will receive a total of 12 aircraft this year, compared to 16 which were originally planned, and a total of 16 in 2021, versus 25 planned. The company ended the second quarter with cash, cash equivalents and short term investments liquidity of $1.2 billion. Spirit also reduced their daily cash burn from $9.5 million in April to around $1.5 million in June, but based on the flattening demand trends, the carrier expects their third quarter cash burn to rise to between $3-4 million daily.
In after-hours trading on Wednesday (July 22, 2020), shares in Spirit Airlines, Inc. (NASDAQ: SAVE) were trading 2.22 percent lower at $16.29/share (5:49 PM EDT).
Source: Spirit Airlines