Alaska Air Group and Spirit Airlines both revised their third-quarter guidance to reflect improvements in unit revenue and non-fuel costs.

Alaska said in an Oct. 10 investor update that unit revenue, measured in TRASM, is expected to come in at 4.4%, near the higher end of its prior guidance of up 3%-5%. Non-fuel unit costs, measured in CASM-ex, grew by 3.4% in 3Q, better than previous estimates of 5%. 

Alaska said the improved cost outlook was because of higher-than-planned capacity growth (3.4%), better productivity and some maintenance costs being shifted into 4Q. The company was also helped out by cheaper-than-expected jet fuel, gains from securities sales and a diminished tax rate. 

“While the increase in guidance may have been expected, the magnitude was greater than anticipated,” Cowen & Co. analysts wrote in a recent investor note. “We expect Alaska to continue to benefit from the grounding of the 737 MAX, even though they were to have ended the year with 10 .... Management now anticipates all 10 aircraft will be delivered in 2020.”

Florida-based Spirit Airlines, meanwhile, estimated in an Oct. 10 investor update that TRASM will be 2% lower from the year-earlier period, better than prior guidance of down 2%-2.5%. The ultra-LCC said the better result was mainly because of a smaller-than-expected impact on forward bookings related to Hurricane Dorian, as well as higher-than-expected passenger volume.

Spirit anticipates adjusted CASM-ex of 8.5%, also better than the company’s previous guidance of between 9%-10%. Non-fuel unit costs were aided by less crew disruption and passenger re-accommodation costs because of improved operational performance. Since September, Spirit has achieved improved its completion-factor despite higher weather-related cancellations, the company noted. Capacity grew by 11.6%, slightly ahead of prior estimates of 11.5%.

Cowen & Co. noted that Spirit continues to see low off-peak fares, as the company has been focused on lifting volumes at the expense of yield. The analysts predicted Q4 CASM-ex will increase 3.1%, while RASM will decline 6.2% because of low off-peak fares and more challenging year-over-year comparisons. 

Alaska will report 3Q earnings Oct. 23, while Spirit’s results are scheduled to be released Nov. 5.

Ben Goldstein,