Spirit Airlines warns Airbus production problems could last beyond 2021

CHICAGO (Reuters) - Spirit Airlines Inc SAVE.N warned on Thursday that Airbus SE AIR.PA production problems are set to last beyond 2021, later than the European planemaker has suggested and potentially hitting the budget carrier's future growth rate.

Fast-growing Spirit expects to increase its capacity, or available seat miles, by 17% to 19% this year after a 16.6% rise in 2019, fueled largely by new Airbus aircraft.

By comparison, major U.S. airlines grew their capacity in the single digits in 2019, while low-cost carrier Southwest Airlines Co's LUV.N capacity shrank as its fleet was hit by the grounding of Boeing Co's BA.N 737 MAX jets.

Future capacity growth at Spirit, which only operates Airbus jets, could be slowed by production problems at Airbus, delays related to a U.S. tariff dispute and additional engine supply issues with Pratt & Whitney, executives said on a conference call.

Spirit said its 2020 guidance already accounts for several months of aircraft delivery delays, with the carrier now expecting 15 A320neo deliveries this year, down from 21 previously.

“However, a lot of the delays that we’re seeing are actually pushing 2021 capacity,” Spirit President and CEO Ted Christie said on the call.

Spirit is working with Airbus and Pratt to find remedies for this year and next, while trying to secure “the additional airplanes we need in 2022 and beyond,” Christie said.

In 2021, the carrier now anticipates taking delivery of 26 A320neo aircraft instead of 27. It has 107 deliveries scheduled between 2022 and 2027.

After adding a number of new destinations in 2019, Spirit said growth this year would be through adding new frequencies on existing routes and new connections between existing cities in its network.

Revenue at Spirit, which operates more than 650 daily flights to 77 destinations in the United States, Latin America and the Caribbean, rose 12.4% to $970 million in the fourth quarter from a year earlier.

Reporting by Tracy Rucinski; Editing by Steve Orlofsky and Lisa Shumaker