Spirit adjusts cost guidance after pilot contract settlement

Following the resolution last week of a new labour contract with its pilots, Spirit Airlines raised its expected operating expenses excluding fuel for the 2018 Q1 and full-year 2018 by approximately 3 percentage points compared to 2017. In an updated guidance statement, Spirit forecast its adjusted CASM ex-fuel for Q1 2018 will decline about 3% year-over-year (YOY), narrowing from the 5.5% to 6.5% decline Spirit forecast a month earlier. Similarly, Spirit forecast the company’s full-year 2018 CASM ex-fuel would fall somewhere between flat and -1% YOY, contrasted with a 3%-5% drop the ULCC forecast Feb 6. Spirit’s pilots ratified Feb 28 a new 5-year labour contract, ending a contentious 3-year series of negotiations between Spirit’s 1,600 pilots and management. <br/>