Spirit Airlines says operational meltdown cost it about $50 million, cuts third-quarter schedule

Passengers wait in line on the Spirit Airlines check-in counter at Orlando International Airport on the sixth day the airline has cancelled tons of of flights.

Paul Hennessy | LightRocket | Getty Images

Spirit Airlines stated Monday that its massive flight disruptions in latest weeks that affected tens of 1000’s of shoppers and brought about chaos at airports across the nation cost it about $50 million in income.

Shares of the Miramar, Florida-based airline fell greater than 1% in after-hours buying and selling following its forecast.

The low cost service stated it’s making “tactical schedule reductions” for the remainder of the third quarter to melt the blow from staffing shortfalls. Spirit canceled greater than 2,800 flights between July 30 and Aug. 9, citing staffing shortages, unhealthy climate and technical issues.

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

The U.S. Transportation Department stated it “has reminded Spirit of its legal obligations, including its obligation to provide prompt refunds when it cancels or significantly changes a flight and the passenger chooses not to accept the alternative offered. 

It also said it is monitoring the airline and reviewing complaints about the carrier “to make sure that shoppers’ rights are usually not violated. The Department will act if the airline fails to adjust to the relevant legislation.”

Spirit also warned that customers are canceling more bookings, which it attributed to rising numbers of Covid-19 infections. Frontier Airlines and Southwest Airlines this month additionally cut their forecasts, blaming a slowdown in bookings on the fast-spreading delta variant of Covid-19.

“This conduct, along with the Company’s tactical cancellations, is predicted to drive a further $80 to $100 million of unfavourable income impression throughout the third quarter,” it said.

Spirit Airlines’ meltdown prompted Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce Committee, to recently add Spirit Airlines to other U.S. carriers she has been quizzing about flight disruptions and staffing shortages regardless of $54 billion in payroll help that Congress has put aside for carriers since March 2020, the committee confirmed to CNBC.

Spirit didn’t instantly remark about the questions from Cantwell.

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