COVID-19 Crushes Spirit Airlines' Earnings
Airlines have been reporting awful second-quarter earnings results this month as the COVID-19 pandemic caused air travel demand to plunge in March. On Wednesday afternoon, Spirit Airlines (NYSE: SAVE) got in on the action, posting a quarterly loss that was significantly worse than analysts' expectations.
That said, business trends improved significantly at Spirit Airlines over the course of the quarter. And while a surge in COVID-19 cases over the past month is weighing on air travel demand, Spirit's June performance highlights that the airline has an easier path to cash breakeven than its rivals.
Spirit Airlines' revenue plummeted 86.3% year over year to $139 million on an 83.2% capacity reduction last quarter. Not surprisingly, the company couldn't reduce its costs nearly as much as revenue fell. Under generally accepted accounting principles (GAAP), operating expenses declined 61.3% year over year to $329 million, leading to an operating loss of $190 million. Spirit's GAAP pre-tax loss totaled $213 million, and its net loss was $144 million.
Source Fool.com
