(Reuters) – Spirit Airlines said it expects to operate with a positive cash flow from the second quarter after reporting a narrower-than-expected loss on Thursday, on strong domestic demand for travel during the holiday season.
For 2024, airlines are encouraged by a robust holiday season despite ongoing worries regarding the potential impact of increasing interest rates on consumers’ disposable incomes.
“Current booking trends further our confidence that the domestic environment is beginning to rebound,” Chief Executive Officer Ted Christie said.
The company also expects sequential improvement from the fourth quarter to the current quarter in total revenue per available seat mile – a proxy for pricing power.
Spirit reported an adjusted loss of $1.36 per share for the fourth quarter ended Dec. 31, compared with analysts’ average estimate of a loss of $1.46 per share, according to LSEG data.
It said it had made considerable progress in compensation talks with supplier Pratt & Whitney over several jets that were grounded due to a problem with powdered metal in their geared turbofan engines.
In January, the airline had an average of 13 grounded neo aircraft and estimates that number will climb steadily, to an average of about 40 in December 2024.
The airline reported total operating revenue of $1.32 billion, largely in line with analysts’ expectations.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Pooja Desai)
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