Spirit Says June Storms Hurt Results

Spirit Airlines Inc. warned that a "domino effect" following severe weather in June hurt second-quarter results and said pricing pressure may affect results for the second half of the year.

The company said in a filing Monday that storms in Dallas, Chicago, New York and Detroit followed by Tropical Storm Bill led to more than 500 flight cancellations. Spirit said those cancellations, delays and other nonrecurring costs cut about $5 million from second-quarter revenue and increased expenses about $15 million.

Spirit lowered its 2015 operating margin forecast to 21.5% to 23% from 24% to 27%.

The airline said the domestic pricing environment softened in early June due to "competitor pricing actions."

In May, a slight increase in Southwest Airlines Co.'s capacity-growth plans fueled a broad selloff in U.S. airline stocks, highlighting investor jitters that inexpensive fuel could cause carriers to oversupply the market with flights, undoing recent competitive discipline that has helped the industry get more for seats and reach record profit.

Southwest, and discounters such as Spirit and JetBlue Airways Corp., have recently increased capacity more rapidly than American Airlines Group Inc., United Continental Holdings Inc., Delta Air Lines Inc.

Spirit, known for low fares, combined with charges for things such as carry-on bags and soda, said passenger traffic rose 25.1% in June, while capacity increased 28.5%. The percentage of seats filled—or load factor—fell to 87.1% from 89.4%.

On Monday, JetBlue said its passenger revenue per available seat mile fell about 1% during June. Other major carriers are expected to post declines for this metric in the second quarter.

In the first quarter, Spirit posted a sharp increase in its profit as revenue increased almost 13% to $493.4 million.

In after-hours trading, Spirit shares fell 5.4% to $60.11.

--Jack Nicas contributed to this article.

Write to Josh Beckerman at [e-mail]

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