Why Spirit Airlines Jumped 11% Friday Morning
Shares of Spirit Airlines (NYSE: SAVE), a discount airline operator known for cheaper base fares and options for travelers to upgrade amenities, jumped more than 11% Friday morning after the company announced some third-quarter metrics would be better than previously forecast. The conference call will be held on Oct. 24.
Digging into the specifics, management now expects total revenue per available seat mile (RASM) to be down roughly 2% in the third quarter compared to the prior year. While investors would love for that metric to be better, it's not as bad as the 2.5% to 3.5% decline the company had previously guided for. Management also expects cost per available seat mile (CASM), excluding fuel, to rise 8.5%, which is less than the original forecast calling for a 9% to 10% range. The driving force behind better-than-expected RASM was a smaller impact from Hurricane Dorian as well as higher passenger volume, and better operational performance was attributed to the lower-than-expected cost increase.
Image source: Spirit Airlines.
Source Fool.com
