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Spirit Disruption Ends with 2,800 Cancelled Flights, $50 Million Lost

After cancelling thousands of flights over one week of serious disruption, Spirit Airlines is now warning investors their margins will be lower. The carrier is now telling investors cancelling 2,826 flights cost them $50 million, reducing their projected third quarter operating revenues below $1 billion.

Sprit Airlines’ network meltdown negatively impacted the carrier by up to $100 million, potentially dropping their profit margins and bringing third quarter operating revenues below $1 billion. In an investor update, the carrier outlined the cost of their most chaotic week in history.

“Adverse Weather and Airport Staffing Shortages” to Blame for Network Chaos

According to the airline’s story, the issues that took place between July 30 and August 9, 2021 were caused by a number of problems cascading into each other. The highly-irregular operations were caused by “adverse weather and airport staffing shortages, leading to severe crew dislocations.” As a result, the airline was forced to cancel 2,826 flights, displacing thousands of flyers and costing the airline $50 million.

“On behalf of our entire leadership team, we offer an apology to everyone impacted throughout the course of this event,” Ted Christie, Spirit’s president and CEO, said in the investor update. “We believe the interruption was a singular event driven by an unprecedented confluence of factors and does not reflect systemic issues. ”

Although the crisis has passed, the cancellations aren’t done for the airline. In order to maintain network stability despite a lack of airport staff, the company will continue to make “tactical schedule reductions” through the end of September 2021.

“The Company is also experiencing increased close-in Guest cancellations and softer-than-expected booking trends for the quarter which are believed to be related to rising case counts of COVID-19 and some amount of short-term brand impact from the irregular operations,” the airline wrote in their update. “This behavior, together with the Company’s tactical cancellations, is expected to drive an additional $80 to $100 million of negative revenue impact during the third quarter.”

As a total result, leaders are warning investors profit margins will slide from between 10 to 15 percent positive to negative one percent. Furthermore, their estimated total third quarter operating revenues are projected to be between $885 and $955 million.

Airline Staffing Shortages Causing Carriers to Pull Staff from Unique Places

Although Spirit is contending with unique shortages, they aren’t the only carrier dealing with a lack of airport workers. Both Alaska Airlines and American Airlines are asking their office team to help with customer-facing tasks, ranging from loading luggage to providing basic airport services.

bgasser August 18, 2021

Surprised the hit was only $50M, that seems pretty small considering the chaos that Spirit went through.

jsmiler August 17, 2021

Why does adverse weather affect only one airline?