Back to top

Image: Bigstock

Spirit Airlines' July Traffic Increases, Load Factor Slips

Read MoreHide Full Article

Spirit Airlines (SAVE - Free Report) posted a significant rise in air traffic for the month of July. Traffic – measured in revenue passenger miles (RPMs) – came in at 2.35 billion, up 17.8% on a year-over-year basis. Consolidated capacity (or available seat miles/ASMs) also expanded 22.7% to 2.72 billion.

However, load factor or percentage of seats filled by passengers decreased to 86.3% from 89.8% recorded last July. Load factor fell as traffic growth was outpaced by capacity expansion for the month.

In fact, this Miramar, FL-based low-cost carrier registered a completion factor (system wide) of 97.2% for the month with 73.5% flights on schedule.

Notably, for the first seven months of 2017, Spirit Airlines registered a 12.4% increase in RPMs to 14.18 billion and a 15.5% rise in ASMs to 16.9 billion, both on a year-over-year basis. But load factor fell 240 basis points to 83.9% in the period.

Price Performance

Shares of Spirit Airlines have underperformed its industry in the last three months mainly due to the dispute with its pilots. The stock was down 31% compared with the industry’s decline of 2.4% during the same period.

 

In fact, the dispute with pilots was largely responsible for Spirit Airlines issuing a below-par forecast with respect to total revenue per available seat miles (TRASM: a key measure of unit revenue) for the third quarter. The metric is expected to decline in the band of 2% to 4% on a year-over-year basis, as well. Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We note that passenger related issues have also hurt other U.S. carriers like American Airlines Group (AAL - Free Report) , Delta Air Lines (DAL - Free Report) and United Continental Holdings (UAL - Free Report) so far this year.

5 Trades Could Profit "Big-League" from Trump Policies

If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.

Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>

Published in