Airline stocks have had a volatile week, with Spirit Airlines canceling half of its flights on Wednesday, as the company attempts to resuscitate its business after a plethora of disruptions that occurred last weekend related to inclement weather, staffing shortages, and technology issues.
Spirit slashed over 1,000 flights since Sunday and hundreds more were delayed, enraging its customer base and sparking rumors of bankruptcy.
Aggravated customers headed to social media to complain about the cancellations and problems with getting ahold of customer service agents. On social media platforms like Twitter, long lines at airports showed images of travelers lying on the floor near gates.
“I want to go home,” a passenger said.
“It’s frustrating,” another passenger said. “We’re traveling with two little kids.”
Spirit blamed the disruptions on a spike in summer travel, as pent-up demand from the pandemic caused a faster rebound in air travel than airline executives had projected. Packed flights mean fewer options to rebook guests, the Spirit said.
“The last three days were extremely difficult for our Guests and Team Members, and for that we sincerely apologize,” Spirit said in a statement.
“We are experiencing some cancellations today resulting from the culmination of weather events and other operational challenges across various parts of our network,” the airline’s statement also said. “We are working directly with our Guests to handle their needs.”
“In responding to these challenges, Spirit has implemented some proactive cancellations again today to reset our operations,” Spirit spokesperson Field Sutton wrote in a statement to NPR. “Most of our flights currently remain scheduled as planned.”
Over 340 flights, or 50% of its daily schedule, were canceled Wednesday, according to flight-tracking site FlightAware. But ailines sometimes cancel flights to prevent additional disruptions and make operations more efficient and safe for employees.
The airline also took to Twitter, tweeting:” We are experiencing operational challenges in some areas of our network. Before going to the airport, check your email and current flight status here: bit.ly/Spirit_Status. The fastest way to receive assistance is to visit our webchat: bit.ly/Contact_Spirit.”
Spirit said it anticipates that cancellations will “progressively drop” in the near future.
The news has been burdensome for Spirit’s stock, which has fallen almost 10% over the past 5 days. The start of that decline could also have been attributed to renewed mask mandates and fear that the virulent delta variant of the coronavirus could wreak havoc on the economic reopening.
Travel and airline ETFs have also been affected by the Spirit chaos this week. The U.S. Global Jets ETF (JETS) fell over 2.15% on Wednesday amid the news, while the First Trust Nasdaq Transportation ETF (FTXR) also faced headwinds.
According to investopedia.com: “JETS, the only pure play airline ETF, targets the U.S. Global Jets Index. About 80% of the index’s components are domestic airlines and companies involved in the aviation industry, and 20% are international companies. JETS is a blended, multi-cap ETF, although it is weighted predominantly toward large-cap companies. The fund’s portfolio is heavily weighted toward a small number of major U.S. airline companies. The top holdings of JETS include American Airlines Group Inc. (AAL), a domestic and international carrier; Southwest Airlines Co. (LUV), a low-cost carrier; and United Airlines Holdings Inc. (UAL), a domestic and international carrier.“
Spirit wasn’t the only air carrier to experience problems this week however. American Airlines this week also slashed hundreds of flights that started with hours of brutal weather that included high winds, lightning, and hail that plagued Dallas/Fort Worth International Airport, its major hub.
But unlike Spirit, on Wednesday, American’s operation found a reprieve from the prior day, with about 100 cancellations, roughly 3% of the operation, down from 12% of canceled flights on Tuesday.
“A prolonged severe weather event in Dallas Fort-Worth on Sunday night into Monday morning brought sustained heavy rain, strong winds, lightning, microbursts and hail to our largest hub,” American Airlines spokesperson Laura Masvidal said in a statement to NPR. “The nine-hour weather event resulted in flight delays, cancellations and nearly 100 diversions. Our team members are working around the clock to care for our customers.”
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