Was Spirit Airlines' Investor Update Good News or Bad News?

In early May, flight cancellations surged at Spirit Airlines (NASDAQ: SAVE) as a dispute between management and the company's pilots spiraled out of control. Last month, the company took a preliminary tally of the damage. At that time, Spirit projected that its unit costs would soar in the second quarter because of the operational disruption, but that unit revenue would stay roughly in line with its original forecast.

On Monday afternoon, Spirit Airlines released its final investor update for the quarter. On the plus side, unit revenue will come in ahead of the company's previous guidance. However, Spirit continues to suffer an unusually high number of flight cancellations.

Non-fuel unit costs surged 9.5% to 10.5% year over year at Spirit Airlines last quarter, according to the company's recent investor update. That's 0.5 percentage points above the range provided last month, and far above the 3.5% to 4.5% increase Spirit Airlines had initially expected. Unit costs were driven up primarily by the cost of dealing with the uptick in flight cancellations.

Source: Fool.com