Ultra-low-cost carrier Spirit Airlines has become the latest US airline to lower its third-quarter revenue forecast based on higher-than-expected fuel costs.
The South Florida-based carrier disclosed in a 12 September investor update that it adujusted its estimated fuel cost per gallon during the three-month period ending 30 September to $3.06 from its previous estimate of $2.80 – an 8.5% increase.
”During the last few weeks, the company has seen heightened promotional activity with steep discounting for travel booked for the second half of the third quarter through the pre-Thanksgiving travel period,” Spirit says. ”In addition, fuel prices have increased since the company gave its guidance for the third quarter.
“As such, the company has reduced its third quarter 2023 outlook,” adds the airline.
Spirit has reduced its third-quarter revenue forecast to $1.25 billion-$1.26 billion from its previous estimate of between $1.3 billion and $1.32 billion.
Other US carriers such as Alaska Airlines, Southwest Airlines and United Airlines have also recently adjusted their fuel-cost estimates for the third quarter.
Alaska disclosed on 6 September that its estimated fuel cost per gallon during the period has been adjusted to $3.15-$3.25 from its previous estimate of between $2.70 and $2.80, for an increase of about 16%.
Meanwhile, Chicago-based United raised its fuel cost per gallon estimate for the third quarter to between $2.95 and $3.05. Previously, the airline said it anticipated fuel costs to be in the $2.50 to $2.80 per gallon range.
“Fuel jumped up a bit after everybody’s [second-quarter] earnings calls, so I don’t think we were alone in updating fuel in the third quarter to reflect that fuel has gone up 20-ish percent,” United chief financial officer Gerry Laderman said during TD Cowen’s Global Transportation Conference on 6 September.
