US airlines warn of lower margins and higher costs in Q3

With just two weeks to go until the third quarter is over, various US airlines have fired warning shots over their financial results for Q3. Many cite rising labor expenses and oil prices and changing booking patterns as reasons for expected lower operating profits.

Spirit Airlines expects Q3 revenues to be lower to between $1.245 and $1.255 billion compared to the previous guidance of between $1.300 billion and $1.320 billion. Fuel costs will be higher at $3.06 per gallon versus $2.80 that was guided in August. The adjusted operating margin will be down to -14.5 to -15.5 percent compared to -5.5 to -7.5 percent. Capacity will grow by 13.4 percent year on year, slightly down from 13.7 percent in the earlier estimate.