Spirit Airlines announced on Monday that their recent operational problems cost them around $50 million in lost revenue. Spirit Airlines’ operational problems resulted in more than 2,800 canceled flights for 11 straight days.
According to the airline, their operation meltdown started in late July. Their problems included staffing shortages, technical glitches, and bad weather. Spirit decided to reduce its flights until September 30 calling the move “tactical schedule reductions”.
With reduced flights for the coming weeks and thousands of canceled flights, Spirit estimates its revenue for the third quarter to range from $885 million to $955 million. That’s a 4% to 11% drop from the same quarter in 2019.
On the bright side, Sprit’s numbers are showing signs of improvement since the fiasco. However, its recovery made their expenses go up. The airline announced that they paid for stranded passengers’ flights on other airlines. Also, the airline covered the hotel accommodations of some passengers. And on top of that, Spirit also had to pay extra for their employees to go on overtime.
Spirit estimates that their operating expenses for the third quarter are above $1 billion. That’s 20% higher than their operational expenses during the third quarter of 2019. The airline’s shares also dropped by more than 2% as the stock market closed on Monday.
“Overlapping Challenges” Resulting in Operational Problems
Spirit had a total of 2,826 canceled flights from July 30 to August 9. The airline cited “overlapping challenges” for their operational problems. On some days, the airline canceled more than 60% of the scheduled flights.
CEO Ted Christie apologized for the delayed and canceled flights that affected thousands of customers. The airline’s CEO said that “We believe that interruption was a singular event driven by an unprecedented confluence of factors and does not reflect systemic issues”. Christie also said that Spirit invested in things that make the airline “one of the most efficient and reliable airlines in the US industry”.
History of Lackluster Service
Spirit is known for its high rate of consumer complaints over the years. In 2019, it had the highest rate of complaints among 16 airlines according to the Transportation Department. Last year, it slightly improved ranking 12th of 16.
