Investing.com – Spirit Airlines stock (NYSE:SAVE) recovered its premarket losses and traded 1.4% higher Tuesday as traders gave more weight to the CEO’s statement that the recent disruption to its regular operations isn’t systemic and was a one-off driven by several adversarial factors coming together.
Between July 30 and August 9, the ultra-low-cost carrier had to cancel as many as 2,826 flights due to a series of overlapping challenges. These primarily included adverse weather and airport staffing shortages.
The company incurred additional expenses to accommodate the passengers whose travel plans were affected. In cases, it had to purchase tickets on other airlines and cover hotel and other travel-related costs. Additional labor expenses, including overtime, also contributed to the problems.
To tackle the challenges, the airline has cancelled several flights in the ongoing quarter. It is also facing cancellations by guests, many of whom are doing so close to the date of their travel, making life more difficult for the airline.
Canceled bookings by customers, along with the company’s own tactical cancellations, are expected to drive an additional $80 million to $100 million of lost revenue during the third quarter.