Spirit Airlines, Inc. (SAVE), an ultra-low cost airline, on Tuesday revised its expectations for the first-quarter of 2023. In addition, the company said it expects profitability in the second, third, and fourth quarters as well as full year.
For the three-month period, the airline now expects its capacity will be about a half percentage point lower than previously expected. This is mainly due to a rise in the number of unscheduled engine removals during the quarter, resulting in a lower level of flight operations.
For the first-quarter, the company projects its adjusted operating expenses to be in the range of $1.45 billion-$1.47 billion or, $60 million to $70 million higher than its previous outlook, due to a higher-than-expected fuel costs. In addition, one-time costs associated with the implementation of its new pilot contract are expected to be higher than initially estimated.
Spirit Airlines still estimates that beginning with the second quarter, the run-rate impact of its new pilot contract will be about $40 million a quarter in 2023.
Ted Christie, Spirit's CEO, said: "Pratt & Whitney has indicated supply chain issues are beginning to improve and we should see less impact from unscheduled events as we move throughout the year. As such, we expect to see a steady increase in fleet utilization, reaching normalized utilization levels by the end of the year. Demand remains strong and, despite higher fuel prices, we are confident we will be profitable in the second, third, and fourth quarters of 2023 and profitable for the full year 2023."
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