(Reuters) – Spirit Airlines forecast its current-quarter revenue below analysts’ estimates on Thursday, as excess capacity and intense competition on its routes hamper the ultra-low-cost carrier’s pricing power.
It also anticipates a $7.2 million hit to its third-quarter operating income due to operational disruptions caused by the CrowdStrike IT outage, which forced the carrier to cancel 470 flights.
The cyber outage, which was triggered by CrowdStrike’s “Falcon Sensor” software update, had crippled industries across the globe including airlines.
A rush among carriers to expand capacity in order to cash in on strong summer travel demand has forced airlines to offer tickets at a discount to fill their planes.
The Dania Beach, Florida-based company expects its third-quarter total revenue to be between $1.16 billion and $1.18 billion, compared with analysts’ average estimate of $1.33 billion, according to LSEG data.
Spirit is among the most heavily impacted by issues with RTX’s Pratt & Whitney Geared Turbofan engines, which have forced it to ground multiple aircraft and have left the airline with bloated costs.
The ultra-low-cost carrier’s aircraft utilization fell 6.2% to 10.6 hours in the second quarter, primarily due to jets that were unavailable for service due to the GTF engine issues.
It reported an adjusted loss of $1.44 per share for the quarter ended June 30, wider than analysts’ estimates of $1.36 per share.
“Summer demand remains robust and load factors have been strong; however, significant industry capacity increases together with ancillary pricing changes in the competitive environment have made it difficult to increase yields,” CEO Ted Christie said.
The carrier’s operating revenue fell 10.6% to $1.28 billion, compared with Wall Street expectations of $1.29 billion.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Krishna Chandra Eluri)
