Three hurricanes that barreled across key markets in Texas, Florida and the Caribbean helped to pare Spirit Airlines’ third quarter operating revenues by $40 million, the low-cost carrier reported Thursday.
Hurricanes Harvey, Irma and Maria, together with the lingering impact of a pilots work slowdown earlier this year negatively affected the quarter’s revenue by $40 million, Spirit said in an earnings news release. The storms forced the cancellation of more than a thousand flights and incurred other costs beyond the loss of passenger ticket money.
The Miramar-based airline’s quarterly net profit declined 26 percent to $60.2 million or 87 cents a share compared to $81.3 million or $1.17 cents in 2016.
But despite the storms’ impact, the carrier’s operating revenue still rose 10.6 percent to $687.2 million, from $621.3 million, a year ago. The increase came mainly from non-ticket revenues such as fees.
“Multiple hurricanes during the third quarter 2017 caused us to cancel over 1,650 flights,” said Robert Fornaro, Spirit’s president and CEO in a statement. “I am very proud of how the Spirit team pulled together to assist our guests and employees in the regions affected by the storms while keeping the rest of the network running smoothly and still delivering solid financial results.”
Spirit’s quarterly adjusted net earnings per share of 94 cents and revenue of $687.2 million, beat analysts’ estimates of 90 cents and $686.6 million respectively, according to the Zacks Consensus Estimate. Those results helped push the company’s stock up nearly 7 percent to $36.08 in Nasdaq trading Thursday.
He called the third quarter “challenging” on many fronts and lauded his employees for volunteering to assist with the relief efforts.
Spirit officials spoke to analysts about continued double-digit capacity growth over the next few years as more aircraft are added for expansion in domestic and international markets.
Fort Lauderdale-Hollywood International Airport — already it’s largest gateway in terms of flight capacity — will likely see some new international routes launching or being announced in coming months, Fornaro said.
This year through August, Spirit ranked as the airport’s second-busiest carrier with 21.8 percent of passenger traffic ahead of Southwest’s 20.23 percent and behind JetBlue’s 26.7 percent shares, airport records show.
Spirit’s growth plans however could be derailed if its 1,600 unionized pilots, unhappy with current negotiations for a new contract, opt to strike.
Spirit said its management and the pilots, who are represented by the Air Line Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.
“The two parties are close, but we have no meetings scheduled,” Fornaro told the Sun Sentinel. They last met for negotiations in early September, he said.
In a statement from the pilots’ union Thursday, representatives said Spirit’s future growth plans were in “serious jeopardy,” without a competitive pilot contract.
“It’s time for Spirit management to come back to the table with a contract that will attract — and retain — the high-quality pilot workforce needed for Spirit to grow and compete successfully,” said Capt. Stuart Morrison, chairman of Spirit’s ALPA unit.
The airline and pilots have been in contract negotiations for more than two years. In mid-September, the unionized group voted in favor of a strike in the event talks hit an impasse and the parties are released from mediation.
“Our goal remains to negotiate a contract that protects both the work and the welfare of our pilots,” Morrison said after the vote.