Spirit Airlines posts second-quarter net loss of US$144.4 million

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Spirit Airlines reported total operating revenue for the second quarter 2020 of US$138.5 million, a decrease of 86.3% year over year, due to the significant decline in air travel demand as a result of the COVID-19 pandemic. Spirit reported a net loss of US$144.4 million for the second quarter compared to net income of US$114.5 million in the second quarter of 2019

For the second quarter 2020, total GAAP operating expenses decreased 61.3% year over year to US$328.9 million, which includes US$151.9 million of special items. Adjusted operating expenses for the second quarter 2020 decreased 43.3% year over year to US$480.8 million. These changes were primarily driven by a 92.5% decrease in fuel expense and reductions in various other expenses related to volume of flight operations, such as landing fees and other rents, distribution, and ground handling. Salaries, wages and benefits expense was about flat compared to the same period last year despite an 11.6% year over year increase in pilot and flight attendant workforce prior to the onset of the COVID-19 pandemic. In March, Spirit suspended hiring across the Company except to fill essential roles.

During the second quarter 2020, Spirit entered into an agreement with Airbus (the Deferral Agreement) to defer certain aircraft deliveries originally scheduled in 2020 and 2021. Under the terms of the Deferral Agreement, the company now anticipates a total of 12 aircraft deliveries in 2020 (compared to 16 as previously planned) and a total of 16 in 2021 (compared to 25 as previously planned).

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