The share prices of Spirit Airlines, the ultra low cost carrier, SAVE have increased after the company has announced in a SEC filing that it’s raised its third quarter revenue per available seat mile guidance. Spirit Airlines suffered the loss during cancellation of the tourists after hurricane.
The low-cost airline company is now expecting to experience a roughly 6.5% year-over-year decline in RASM in its third quarter, instead of Spirit’s previously projected guidance of a roughly 7% to 8.5% drop off.
Spirit Airlines topped its guidance for the highly important metric in its 8K filing yesterday based in part on improved on the ticket and non-ticket yields and better-than-expected load factor.
Spirit Airlines offered up its previous RASM projection of up to an 8.5% decline in September amid concerns that the wave of hurricanes would hurt the airline more than it now expects.
Spirit Airlines adjusted the cost per available seat mile without accounting for the cost of fuel is projected to be flat or fall only marginally, which is compared to its previous estimate of up to a 3% decline.
Still, the Hurricanes Harvey, Irma, and Maria greatly impacted largely on Spirit Airlines. These tropical storms forced the airline to cancel over 1,650 flights. It costs Spirit Airlines about $40 million.
In September Spirit Airlines cancelled approximately 1,400 flights. Yet the revenue in the September passenger miles jumped by 5.9% based on an 8.9% gain in overall capacity.
In its third quarter, Spirit Airlines announced that it raised total available seat miles by 18%.
This updated projection, coupled with a big increase in overall capacity, helped send shares of Spirit up over 8% on Tuesday morning.
The stock price of the Spirit Airlines has slipped back a bit since then and now hovers around 5% higher.
Spirit Airlines stock sits roughly 42% below its 52-week high of $60.40 per share.
Spirit Airlines is set to report its third-quarter results in Tuesday, October 24.
