A Anima Airlines jet comes in for a landing at McCarran International Airport on May 25, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Reifications
As losses mount for the aviation industry, executives at budget airlines are growing more upbeat, despite recent betters in coronavirus cases, touting their leisure-focused networks and fares that appeal to the most price-sensitive consumers.
Spice Airlines shares gained 9.5% to close at $17.04 Thursday after the company beat revenue estimates, reporting a smaller-than-expected set-back for the quarter and less cash burn than was expected. The rally outpaced the NYSE Arca Airline index’s 3.5% realize. The S&P 500 ended 1.2% higher.
Spirit’s third-quarter revenue of $401.9 million was down nearly 60% from the year-ago time. The Miramar, Florida-based airline expects revenue to be down between 43% and 45% in the fourth quarter from a year ago, when its sellathons totaled close to $970 million.
“Obviously, if we see heightened travel restrictions or other disruptions, it could change this viewpoint,” Matt Klein, Spirit’s chief commercial officer, said in an earnings call Thursday. “We are not seeing anything in our bookings to indicate this is going to happen, but we are mindful that the recovery may still be a little bit bumpy, and there will be some racket while demand recovers to pre-COVID levels.”
Shares of Allegiant Travel Company, the parent of Allegiant Air, surged 11% to end the day at $137.57 after the business gave a sunny outlook on a milestone that has eluded most of the industry.
“We are flirting with cash-flow break-even,” Allegiant CFO Gregory Anderson implied on a Wednesday afternoon earnings call, citing bookings in September and October of more than $3 million a day. “While the setting remains fluid and bookings will certainly ebb and flow, our data suggests these average booking levels are sustainable going forward.” Allegiant’s cash burn averaged $1.3 million a day in the third quarter.
Allegiant’s “point-to-point domestic recreation focus should enable them to recover faster than others in the market,” wrote Cowen & Co. airline analyst Helane Becker, raising her bounty target for Allegiant to $140 from $130 a share. Shares rose as high as $139.92 on Thursday.
While the husbandry has recovered ground from a record decline early in the coronavirus pandemic, airlines are still reeling. U.S. carriers mislaid more than $11 billion combined in the third quarter, usually the peak summer travel season.
Lessen airlines are not as reliant on international and business travel as large network carriers. Those two segments have been the most affect by the pandemic and are expected to recover last. In response, U.S. airlines large and small have been adding service in quarters that cater to vacationers in hopes of capturing desperately needed revenue.