Spirit Airlines (SAVE Quick QuoteSAVE - Free Report) witnessed significant disruption in its operations over the period between Jul 30 and Aug 9, which caused the company to cancel several flights.

In a SEC filing, the airline revealed that adverse weather conditions and airport staffing shortages led to 2,826 canceled flights during Jul 30-Aug 9. As a result, the company estimates a negative impact of approximately $50 million on its revenues. Amid continuing airport staffing shortages, Spirit Airlines said that it will make “tactical schedule reductions throughout the remainder of the third quarter.”

Amid a fresh increase in coronavirus cases, the carrier is also witnessing uptick in cancellations and softer-than-expected booking trends for the third quarter. Apart from rise in COVID-19 cases, the carrier believes that it could be a short-term impact of the operational disruptions. Spirit Airlines estimates an additional impact of $80-$100 million on revenues in the third quarter as a result of weakness in bookings. The company expects third-quarter revenues to be between $885 million and $955 million.

Spirit Airlines, Inc. Price

Spirit Airlines, Inc. price | Spirit Airlines, Inc. Quote

Due to irregular operations, the carrier incurred additional expenses associated with re-accommodation of customers whose travel plans were hampered. Additional labor expenses also bumped up costs. Adjusted operating expenses are predicted in the band of $1,030-$1,040 million for the third quarter compared with the previous expectation of $1,000-$1,010 million. Adjusted EBITDA margin is now estimated between (8%) and (1%) for the third quarter compared with 10-15% expected previously. Fuel price per gallon is forecast to be $2.19, higher than $2.14 expected previously. Capacity, measured in available seat miles (ASMs), is anticipated to increase 4.2% in the third quarter from the 2019 level. Previously, the same was expected to rise 10.6% from the third quarter of 2019.

Zacks Rank & Key Picks

Spirit Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest (SKYW Quick QuoteSKYW - Free Report) , GATX Corporation (GATX Quick QuoteGATX - Free Report) and Ryder System (R Quick QuoteR - Free Report) . While SkyWest and Ryder sport a Zacks Rank #1 (Strong Buy), GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest, GATX and Ryder have rallied more than 38%, 45% and 100% in a year’s time, respectively.