Category Archives: Spirit Airlines

Spirit Airlines is finally coming to Miami

2021 "Spirit Untamed" promotional livery

Spirit Airlines has long had a competitive hub at lower-cost Fort Lauderdale-Hollywood Airport (FLL). Now the growing carrier is planning to expand to nearby Miami International Airport (MIA) in October following the moves of other low-cost carriers.

According to NBC 6 in South Florida, Spirit Airlines is planning to fly from MIA up to 30 domestic and international destinations starting on October 6, 2021.

Details will follow.

Current Spirit routes from the FLL hub:

Frontier Airlines has also been expanding at MIA along with Southwest Airlines.

This will put increased pressure on American Airlines’ hub at MIA.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N932NK (msn 10008) (Spirit Untamed) BWI (Brian McDonough). Image: 953897.

Spirit Airlines aircraft slide show:

Spirit Airlines adds two more routes from Louisville

Spirit Airlines has announced the addition of two new, nonstop routes from the Derby City to Tampa (TPA) and Fort Myers (RSW) on Florida’s Gulf Coast starting later this year. 

Flights from Louisville (SDF)

Destination:

Flights Available:

Launch Date:

Fort Lauderdale (FLL)

Daily

May 27, 2021

Las Vegas (LAS)

Daily

May 27, 2021

Los Angeles (LAX)

Daily

May 27, 2021

Orlando (MCO)

Daily

May 27, 2021

Pensacola (PNS)

3X Weekly

June 10, 2021

Fort Myers (RSW) NEW

4X Weekly

Nov. 17, 2021

Tampa (TPA) NEW

3X Weekly

Nov. 18, 2021

Spirit flight 1227 will be the airline’s first departure from Louisville Muhammad Ali International Airport (SDF). Plans call for it to leave under a water cannon salute with nonstop service to Fort Lauderdale/Hollywood. The rest of the day’s schedule calls for flights to and from Orlando, Las Vegas and Los Angeles with service to Pensacola following in June. Thursday’s announcement means SDF travelers will be able to catch nonstop flights to seven cities—and connections throughout the U.S., Latin America and the Caribbean—while enjoying Spirit’s famous low fares, Signature Service and on-time performance.

Spirit continues to seize growth opportunities as demand for air travel increases. This year, 16 new fuel-efficient Airbus A320neo planes will join the airline’s Fit Fleet™, which is among the youngest in the industry. Next year, Spirit plans to accept another 21 new planes.

Spirit Airlines prices its offering of 10,594,073 shares of its common stock at $35.05 a share

Spirit Airlines has announced it has priced its underwritten public offering of $440,000,000 aggregate principal amount of 1.00% convertible senior notes due 2026 (the “Convertible Notes” and such offering, the “Convertible Notes Offering”). The net proceeds to Spirit from the Convertible Notes Offering, after deducting underwriting discounts and other offering expenses, are expected to be approximately $428.3 million.

Spirit has granted the underwriters of the Convertible Notes Offering a 30-day option to purchase up to $60,000,000 aggregate principal amount of additional Convertible Notes, solely to cover over-allotments, in the Convertible Notes Offering. The Convertible Notes will be convertible by holders if certain conditions are met, and during certain periods, based on an initial conversion rate of 20.3791 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $49.07 per share, representing a premium of approximately 40.0% over the last reported sale price of $35.05 per share of Spirit’s common stock on April 28, 2021. Spirit will settle conversions of the Convertible Notes in cash or a combination of cash and shares of common stock, at Spirit’s election.

Spirit also separately priced its registered direct offering of 10,594,073 shares of its common stock at an offering price of $35.05 per share (the “Common Stock Offering”).

Spirit expects to use approximately $368.7 million of the net proceeds from the Common Stock Offering to redeem $340.0 million aggregate principal amount of its 8.00% Senior Secured Notes due 2025 at a redemption price equal to 108.0%, plus accrued and unpaid interest on the principal amount being redeemed up to, but excluding, the redemption date. Spirit expects to use the net proceeds from the Convertible Notes Offering (together with existing cash on hand, if the underwriters do not exercise their option to purchase additional Convertible Notes) to repurchase approximately $146.8 million aggregate principal amount of its outstanding 4.75% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) for approximately $440.7 million, including accrued and unpaid interest on the 2025 Convertible Notes repurchased, pursuant to privately negotiated agreements with a limited number of current holders of such 2025 Convertible Notes, which agreements are conditioned upon the consummation of the Convertible Notes Offering. Spirit expects to use the remaining net proceeds from the Common Stock Offering and any remaining net proceeds from the Convertible Notes Offering for general corporate purposes. Each of the Common Stock Offering and the Convertible Notes Offering is expected to close on April 30, 2021, subject to customary closing conditions. The closing of neither the Common Stock Offering nor the Convertible Notes Offering is conditioned upon the closing of the other offering.

Delivered on January 30, 2020

Above Copyright Photo: Spirit Airlines Airbus A320-271N WL N925NK (msn 9407) FLL (Andy Cripps). Image: 949115.

Spirit Airlines aircraft slide show:

Spirit Airlines loses $112.3 million in the first quarter

Delivered on November 9, 2019

Spirit Airlines, Inc. today reported first quarter 2021 financial results.

The company ended the first quarter 2021 with $1.9 billion of unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility

First Quarter 2021

As Reported                           Adjusted

First Quarter 2020

As Reported                  Adjusted

(GAAP)                             (non-GAAP)1

          (GAAP)                      (non-GAAP)1

Total Operating Revenues

$461.3 million                      $461.3 million

       $771.1 million                 $771.1 million

EBITDA

$(28.2) million                    $(199.7) million

$8.0 million                   $8.0 million

EBITDA Margin

   (6.1)%                              (43.3)%

1.0%                            1.0%

Pre-tax Income (Loss)

$(138.2) million                   $(307.9) million

       $(74.6) million               $(74.6) million

Net Income (Loss)

$(112.3) million                   $(242.5) million

        $(27.8) million               $(58.9) million

Diluted Earnings (Loss) Per Share

   $(1.15)                             $(2.48)

$(0.41)                         $(0.86)

“We were very pleased to see how well both our domestic and international network performed as demand strengthened in the last few weeks of the quarter. This strength, along with improvement in forward bookings, drove positive cash from operations for the full first quarter 2021 even when excluding the payroll support program funds received. Assuming these trends continue, we believe we can achieve a positive Adjusted EBITDA margin for the full year 2021,” said Ted Christie, Spirit’s President and Chief Executive Officer. “While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability.”

COVID-19
Since its initial onset in early 2020, the impact of the COVID-19 pandemic has evolved and continues to be fluid. Therefore, the Company’s financial and operational outlook remains subject to change. The Company continues to monitor the impact of the pandemic on its operations and financial condition, and to adjust its mitigation and operational strategies, accordingly, in order to protect the long-term sustainability and growth of the Company. Spirit has implemented measures for the safety of its Guests and Team Members as well as to mitigate the impact of COVID-19 on its financial position and operations. Please see the Company’s Quarterly Report on Form 10-Q for the period ending March 31, 2021 for additional disclosures regarding these measures.

Capacity and Operations
Load factor for the first quarter 2021 was 72.1 percent on a year-over-year capacity decrease of 26.9 percent. During the first quarter 2021, the U.S. government implemented negative COVID-19 testing requirements for all inbound international travelers entering the United States. About 12 percent of Spirit’s first quarter 2021 capacity was negatively impacted by this new regulation.

Spirit continued to deliver strong operational results during the first quarter 2021. As measured by the DOT, first quarter 2021 Completion Factor2 was 98.6 percent and on-time performance2 was 85.3 percent.

Revenue Performance
Total operating revenues for the first quarter 2021 were $461.3 million, a decrease of 40.2 percent year over year as a result of continued negative impacts to demand for air travel due to the COVID-19 pandemic. Early in the first quarter 2021, the Company experienced another setback in demand as the new international testing requirements were implemented and some states increased jurisdictional restrictions following spikes in COVID-19 case counts. However, in March 2021, as the vaccine rollout gained traction and jurisdictional restrictions eased, domestic and international demand rebounded strongly.

For the first quarter 2021, total revenue per passenger flight segment (“Segment”) decreased 16.4 percent year over year to $84.27. Fare revenue per Segment decreased 24.2 percent to $31.84 while non-ticket revenue per Segment decreased 10.8 percent to $52.433. As has been the case since the start of the COVID-19 pandemic, non-ticket revenue per segment for the first quarter 2021 was impacted by the suspension or reduction of certain booking-related fees; however, as the quarter progressed and domestic and international demand strengthened, average non-ticket revenue per segment improved to above $55.00 for most of March 2021.

Cost Performance
For the first quarter 2021, total GAAP operating expenses decreased 32.0 percent year over year to $563.8 million, primarily due to the grant component of the funding received through the payroll support program (further discussed below). Adjusted operating expenses for the first quarter 2021 decreased 11.5 percent year over year to $733.5 million4. The decrease in adjusted operating expenses was primarily driven by reductions in various flight-volume related expenses compared to the first quarter last year, such as fuel, ground handling and distribution. These decreases were partially offset by higher aircraft rent and higher depreciation and amortization. Additionally, despite the significant decrease in flight operations compared to the first quarter last year, some variable expenses increased. Salaries, wages and benefits increased marginally due to increased costs related to Team Member benefits, primarily driven by a higher volume of health insurance claims, and landing fees and other rents also increased year over year due to rate increases at various airports Spirit serves and decreases in signatory adjustment credits.

“Our first quarter 2021 Adjusted EBITDA margin of negative 43.3 percent was better than we initially expected due to both revenue and non-fuel operating expense coming in at the better end of our range. Since the beginning of March 2021, demand trends have been progressively improving. Assuming these trends continue, we estimate our second quarter 2021 Adjusted EBITDA margin will be between negative 5 percent to breakeven, assuming a fuel price per gallon of $1.95,” said Scott Haralson, Spirit’s Chief Financial Officer. “With our industry-leading low cost structure, we remain confident that the strength of our business model will allow us to fully capitalize on the growth potential ahead of us and drive sustainable, long-term value for our shareholders.”

Fleet
Spirit took delivery of two new A320neo aircraft during the first quarter 2021, financed through direct operating leases, and purchased two A319ceo aircraft off lease. The Company ended the quarter with 159 aircraft in its fleet.

Liquidity and Capital Deployment
Spirit ended first quarter 2021 with unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility of $1.9 billion.

Total capital expenditures for the first quarter 2021 were approximately $92 million, primarily related to pre-delivery deposits associated with future aircraft deliveries and the purchase of two A319 aircraft off lease.

On March 12, 2021, the Company entered into the First Amendment to Credit and Guaranty Agreement (the “First Amendment”), amending its existing Senior Secured Revolving Credit Facility. The First Amendment increases the existing lending commitments by $60 million, for total lending commitments of $240 million, and extends the maturity date from March 30, 2022 to March 30, 2024. The additional $60 million remained undrawn as of March 31, 2021.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. This new legislation extended the payroll support program of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) through March 31, 2021 (“PSP2”). On January 15, 2021, the Company entered into an agreement with the United States Department of the Treasury (“Treasury”) in connection with the PSP2 funding. During the first quarter of 2021, the Company received a total of $184.5 million through the PSP2, used exclusively to pay for salaries, wages and benefits for the Company’s Team Members through March 31, 2021. Of that amount, a total of $25.3 million is in the form of a low-interest, 10-year loan. Also, in connection with its participation in the PSP2, the Company issued warrants to the Treasury to purchase up to 103,761 shares of the Company’s common stock at a strike price of $24.42 per share (the closing price of the shares of the Company’s common stock on December 24, 2020). The remaining amount of $156.5 million, net of related costs, is in the form of a grant and was recognized within special credits on the Company’s condensed consolidated statements of operations during the first quarter 2021.

The American Rescue Plan Act of 2021 (“ARP”) was enacted on March 11, 2021, authorizing Treasury to provide additional assistance to passenger air carriers that received financial assistance under PSP2 (“PSP3”). Under the ARP, Treasury will provide up to $14 billion to fund the PSP3 for employees of passenger air carriers. In April 2021, the Company was notified that, subject to final execution of an agreement with Treasury, it will receive approximately $197.9 million under the PSP3 and an additional $27.7 million under the PSP2. The PSP3 extends certain restrictions imposed on participating airlines, including the restriction to refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2021.

Diluted Share Count
The Company elected to early adopt ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” effective January 1, 2021. Per ASU No. 2020-06, if the Company records a net profit, it will use the “If-Converted Method” for its convertible debt. The dilutive impact from the convertible debt under the “If-Converted Method” based on the convertible debt outstanding as of March 31, 2021 would have been 13.7 million shares had the Company recorded a net profit. The Company anticipates it will continue to use the Treasury Stock Method for the dilutive impact related to outstanding warrants.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N918NK (msn 9259) FLL (Ken Petersen). Image: 948841.

Spirit Airlines aircraft slide show:

Spirit Airlines expands in Los Angeles, adds third destination in Mexico

Spirit Airlines has announced plans to expand internationally from Los Angeles International Airport (LAX) after two decades of providing high value and low fares domestically. The airline will offer daily flights between LAX and Los Cabos International Airport (SJD) starting May 5, and nonstop flights to Puerto Vallarta’s Licenciado Gustavo Diaz Ordaz International Airport (PVR), starting on July 1.

Spirit will also offer Guests the only nonstop flights from LAX to Columbus (CMH), Milwaukee (MKE), LaGuardia (LGA) and Louisville (SDF), as well as a new nonstop flight to St. Louis (STL), substantially expanding the airline’s flight offerings in Southern California.

New Spirit Airlines Service in Los Angeles

Destination:

Flights Available:

Start Date:

Los Cabos (SJD)

Daily

May 5

  Louisville (SDF)

Daily

  May 27

  St. Louis (STL)

Daily

  May 27

Columbus (CMH)

Daily

June 9

  LaGuardia (LGA)

Saturday Only

 June 12

Milwaukee (MKE)

Daily

June 24

  Puerto Vallarta (PVR)

Daily

  July 1

In 1999, Spirit launched its service in California with flights out of LAX, and later grew to serve Sacramento (SMF), Oakland (OAK) and San Diego (SAN) as well. Recently, Spirit stepped up investments in the LA Basin by adding service to Burbank (BUR) and Orange County (SNA).

In other news, Spirit is expanding on its international growth with new flights from Dallas-Fort Worth, Houston and Los Angeles to Puerto Vallarta.

The airline will offer daily flights between Puerto Vallarta and Los Angeles International Airport (LAX), along with service three times weekly from Houston’s George Bush Intercontinental Airport (IAH) and Dallas-Fort Worth International Airport (DFW) operating on Tuesdays, Thursdays and Sundays.

Spirit Airlines Service to Puerto Vallarta

Destination:

Flights Available:

Start Date:

Los Angeles (LAX)

Daily

July 1

  Dallas-Fort Worth (DFW)

3x Weekly

  July 1

  Houston (IAH)

3x Weekly

  July 1

Spirit will also add nonstop service between LAX and Los Cabos, Mexico (SJD) starting May 5. The route will be Spirit’s first international service from Los Angeles, which will be joined by Puerto Vallarta when it launches the following month.

 

Spirit Airlines adds St. Louis and Pensacola

Spirit Airlines announced plans to add St. Louis Lambert International Airport (STL) to its route map with nonstop daily service to five cities in the Spirit of Lindberg’s historic nonstop flight. The airline plans to start flying on Thursday, May 27, with flights to Fort Lauderdale (FLL), Orlando (MCO), Las Vegas (LAS), Los Angeles (LAX) and Pensacola (PNS).

Flights from St. Louis (STL)

Destination

Flights Available:

Launch Date:

Fort Lauderdale (FLL)

Daily

May 27, 2021

Las Vegas (LAS)

Daily

May 27, 2021

Los Angeles (LAX)

Daily

May 27, 2021

Orlando (MCO)

Daily

May 27, 2021

Pensacola (PNS)

Daily

June 10, 2021

St. Louis is the seventh new city added to Spirit’s network in the past year. The airline continues to seize growth opportunities as demand for air travel increases, having announced new service to Louisville, Milwaukee and Pensacola in the past two weeks.

In other news, the airline announced plans to fly to Pensacola International Airport (PNS) starting on June 10. Spirit will offer the only nonstop flights to Columbus (CMH), Indianapolis (IND) and Louisville (SDF), along with nonstop service Austin (AUS), Dallas-Fort Worth (DFW), Kansas City (MCI) and St. Louis (STL).

Spirit Airlines Service to/from PNS

Destination: 

Flights Available: 

Launch Date: 

Austin (AUS)

Tue/Thu/Sun

June 10, 2021

Columbus (CMH)

Mon/Wed/Fri/Sat

June 11, 2021

Dallas-Fort Worth (DFW)

Daily

June 10, 2021

Indianapolis (IND)

Mon/Wed/Fri/Sat

June 11, 2021

Kansas City (MCI)

Mon/Wed/Fri/Sat

June 11, 2021

Louisville (SDF)

Tue/Thu/Sun

June 10, 2021

St. Louis (STL)

Daily

June 10, 2021

Pensacola is the eighth new city added to Spirit’s network in the past year. The airline continues to seize growth opportunities as demand for air travel increases, having announced new service to Louisville, Milwaukee and St. Louis in the past two weeks. Last month, the carrier announced an accelerated delivery schedule for new Airbus aircraft joining Spirit’s Fit Fleet™, which is among the youngest in the industry.

Spirit Airlines aircraft photo gallery:

Spirit Airlines aircraft slide show:

Spirit Airlines adds three new routes from New York LaGuardia, will split operations

Spirit Airlines has announced flights to three new destinations from LaGuardia Airport (LGA) today. The airline will offer nonstop service to San Juan, Puerto Rico (SJU) starting in April, followed by new flights to Nashville (BNA) in May and Los Angeles (LAX) in June. Spirit is also offering more flexibility to Fort Lauderdale/Hollywood (FLL) with an increase to five flights each day.

Spirit will also begin operating flights out of a second terminal at LaGuardia. The carrier worked with the Port Authority of New York and New Jersey to secure additional space for growth in Terminal A (The Marine Air Terminal). Starting on April 28, 2021, Spirit Airlines departures from LGA will take place from the following terminals:

  • Terminal A: All flights to Fort Lauderdale (five flights each day)
  • Terminal C: Flights to all destinations other than Fort Lauderdale will depart from Terminal C

Spirit Airlines at LaGuardia Airport

Destinations:

Frequency:

Start Date:

San Juan, Puerto Rico (SJU)

Saturday-only

April 17, 2021

Nashville (BNA)

Daily

May 5, 2021

Los Angeles (LAX)

Saturday-only

June 12, 2021

Chicago (ORD)

Up to 2x Daily

Existing Service

Detroit (DTW)

2x Daily

Existing Service

Dallas-Fort Worth (DFW)

1x Daily

Existing Service

Fort Lauderdale (FLL)

5x Daily

Existing Service

Myrtle Beach (MYR)

2x Daily

Existing Service

Orlando (MCO)

Up to 2x Daily

Existing Service

Tampa (TPA)

Up to 1x Daily

Existing Service

 

Spirit is working closely with the Port Authority to add communications and signage to ensure Guests arrive at the appropriate terminal. The airline will temporarily offer a complimentary shuttle service between Terminal A and Terminal C, as well. The shuttle will operate every 15-20 minutes and will run between the hours of 4 a.m. and 7 p.m.

Spirit to start three new routes from Milwaukee

Spirit Airlines has announced that Milwaukee is getting More Go on June 24, when the airline’s yellow and black planes start taking off from Milwaukee Mitchell International Airport (MKE).

Spirit will start up daily nonstop flights to Orlando (MCO), Las Vegas (LAS) and MKE’s only nonstop flight to Los Angeles (LAX).

Spirit Airlines Service to/from MKE:

Destination: 

Flights Available: 

Launch Date: 

Las Vegas (LAS)

Daily

June 24, 2021

Los Angeles (LAX)

Daily

June 24, 2021

Orlando (MCO)

Daily

June 24, 2021

Spirit will be the only airline serving Los Angeles nonstop from Milwaukee, removing intermediate stops on the way and making quick trips between the two cities easier than ever.

Spirit Airlines aircraft photo gallery:

Spirit Airlines aircraft slide show:

Spirit Airlines reports 4Q and 2020 financial results

Spirit Airlines, Inc. reported fourth quarter and full year 2020 financial results.

Ended the year 2020 with $1.9 billion of unrestricted cash, cash equivalents

and short-term investment securities

Fourth Quarter 2020 Fourth Quarter 2019
As Reported Adjusted As Reported Adjusted
(GAAP) (non-GAAP) 1 (GAAP) (non-GAAP) 1
Total Operating Revenues $498.5 million $498.5 million $969.8 million $969.8 million
EBITDA $(87.8) million $(88.8) million $186.5 million $191.5 million
EBITDA Margin  (17.6)%  (17.8)%  19.2%  19.7%
Pre-tax Income (Loss) $(204.5) million $(205.5) million $106.8 million $111.7 million
Net Income (Loss) $(157.3) million $(157.7) million $81.2 million $85.0 million
Diluted Earnings (Loss) Per Share $(1.61) $(1.61) $1.18 $1.24

“Soft demand driven by pandemic-related concerns continues to have a significant impact on our operating results. However, our leading low-cost structure remains a key advantage and positions us well to compete in this environment and beyond. Our load factor and Adjusted EBITDA margin for the fourth quarter 2020 are among the best in the industry, illustrating the strength of our business model,” said Ted Christie, Spirit’s President and Chief Executive Officer. “While the road to recovery is anticipated to be choppy, we are confident we will be among the first U.S. carriers to return to profitability.”

Spirit continues to be recognized for a strong reputation within the airline industry and across all industries. The company’s latest accolade was being named to FORTUNE’s 2021 list of World’s Most Admired® Companies. Spirit is one of only three U.S. airlines included on the list, which surveyed top executives and directors from eligible companies, industry experts and financial analysts.

COVID-19
As the COVID-19 pandemic continues to evolve, the Company’s financial and operational outlook remains subject to change. The Company continues to monitor the impacts of the pandemic on its operations and financial condition, and to implement mitigation strategies while working to preserve cash and protect the long-term sustainability of the Company. Spirit has implemented measures for the safety of its Guests and Team Members as well as to mitigate the impact of the COVID-19 on its financial position and operations. Please see the Company’s Annual report on Form 10-K for the period ending December 31, 2020 for additional disclosures regarding these measures.

Capacity and Operations
The Company continues to see a significant negative impact to demand for air travel due to the COVID-19 pandemic. Load factor for the fourth quarter 2020 was 71.5 percent on a year-over-year capacity decrease of 25.4 percent.

For the full year 2020, Spirit delivered an outstanding operational performance, with a Completion Factor2 of 97.9 percent and an on-time performance2 of 86.7 percent, as measured by the DOT. For the full year 2020, Spirit expects it will be ranked first in Completion Factor2 and third in on-time performance2 among reporting carriers.

Revenue Performance
Total operating revenues for the fourth quarter 2020 were $498.5 million, a decrease of 48.6 percent year over year as the COVID-19 pandemic continues to severely affect demand for air travel.

For the fourth quarter 2020, total revenue per passenger flight segment (“Segment”) decreased 14.5 percent year over year to $94.64. Fare revenue per Segment decreased 25.6 percent to $39.22 while non-ticket revenue per Segment only decreased 4.5 percent to $55.423.

Cost Performance
For the fourth quarter 2020, total GAAP operating expenses were $658.4 million, a decrease of 22.1 percent year over year. Adjusted operating expenses for the fourth quarter 2020 were $659.4 million4, a decrease of 21.5 percent year over year. These changes were primarily driven by a decrease in both fuel rate and volume compared to the fourth quarter last year. Despite the significant decrease in flight volume compared to the fourth quarter last year, some volume-related expenses increased year over year. For example, landing fees and other rents increased 6.8 percent year over year due to rate increases at various airports Spirit serves; and salaries, wages, and benefits (“SWB”) increased 3.1 percent due to an increase in crew members prior to the hiring freeze that followed the onset of COVID-19 pandemic. The SWB related to additional crew members was partially offset by Team Members who participated in voluntary leave programs.

Fleet
Spirit took delivery of two new A320neo aircraft during the fourth quarter 2020, one of which was debt financed and the other was financed through a sale/leaseback transaction. The Company ended the year with 157 aircraft in its fleet.

Liquidity and Capital Deployment
Spirit ended the year with unrestricted cash, cash equivalents, and short-term investment securities of $1.9 billion. Daily cash burn5 in the fourth quarter 2020 averaged $1.8 million.

Total capital expenditures for the full year 2020 were approximately $537 million (approximately $194 million net of financings).

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. This new legislation extends the Payroll Support Program (“PSP2”) of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) through March 31, 2021. In late December, the Company notified the U.S. Department of the Treasury (“Treasury”) of its intent to participate in the PSP2, and entered into an agreement with the Treasury in connection with this PSP2 funding on January 15, 2021. The Company expects to receive approximately $184.5 million pursuant to the PSP2. In January 2021, the Company received the first installment of $92.2 million in the form of a grant. Of the remaining amount, the Company expects that approximately $25 million will be in the form of a low-interest, 10-year loan. Also, in connection with its participation in PSP2, the Company is required to issue warrants to the Treasury to purchase up to 103,761 shares of the Company’s common stock at a strike price of $24.42 per share (the closing price of the shares of the Company’s common stock on December 24, 2020).

“Our fourth quarter Adjusted EBITDA margin of negative 17.81 percent was in line with our revised guidance, with revenue coming in as expected and non-fuel costs coming in slightly better. In the first quarter 2021, we are facing new travel restrictions and state quarantine requirements which have temporarily stalled the demand recovery. In addition, we are seeing a recent rise in fuel prices compared to the fourth quarter 2020. As such, we estimate our first quarter 2021 Adjusted EBITDA margin will be between negative 45 to negative 55 percent, assuming a fuel price per gallon of $1.75,” said Scott Haralson, Spirit’s Chief Financial Officer. “While these short-term developments are frustrating, sentiment is improving and we are well-positioned to succeed as demand recovers.”

Forward Looking Guidance

First Quarter 2021 (1)
Capacity – Available Seat Miles (ASMs) (% Change vs. 1Q19) (2) Down 17%
Adjusted Operating Expenses ($Millions) (3) $740 to $750
Adjusted EBITDA Margin (%) (3) (45)% to (55)%
Fuel Cost per Gallon ($) (4) $1.75
Effective Tax Rate (3)  21%
Full Year 2021 (1)
Total Capital Expenditures ($Millions) (5)
Pre-delivery deposits, net of refunds $105
Other capital expenditures $60 to $85
Estimated Diluted Share Count (1)
If the Company is in a net loss position, average weighted diluted shares is equal to average basic shares outstanding for the period. If the Company records a net profit, it currently uses the Treasury Stock Method to compute the impact from its convertible debt and warrants on the average weighted diluted share count for the period.
Beginning 1/1/22, if the Company records a net profit, per ASU 2020-06, the Company currently expects to use the “If-Converted Method” for its convertible debt. The dilutive impact from the convertible debt under the “If-Converted Method” based on the convertible debt outstanding as of 12/31/20 is 13.7 million shares. The Company anticipates it will continue to use the Treasury Stock Method for the dilutive impact related to outstanding warrants.
Fleet (1)
Expected aircraft deliveries in 2021 16
Expected aircraft deliveries in 2022 17
The Company’s current fleet plan is available at ir.spirit.com.

(1) The 2021 guidance provided in this document is based on the Company’s preliminary estimates of its first quarter and full year 2021 results, which are subject to change in connection with the completion of the Company’s final closing procedures, final adjustments and other developments that may arise in the course of the preparation or audit of its financial statements.
(2) The Company expects that air travel demand will continue to gradually recover in 2021 and continues to closely monitor demand and will make adjustments to the flight schedule as appropriate. However, the situation continues to be fluid and actual capacity adjustments may be different than what the Company currently expects.
(3) Excludes special items which may include loss on disposal of assets, special charges, and other items which are not estimable at this time.
(4) Includes fuel taxes and into-plane fuel cost.
(5) Total Capital Expenditures assumes all aircraft are either delivered under direct leases or financed through Sale/Leaseback transactions. Other capital expenditures are primarily related to aircraft parts, including one spare engine and other spare parts. During the fourth quarter 2020, the Company accelerated 6 aircraft deliveries into 2022 which increased expected net pre-delivery deposits to be paid in 2021 from $40 million to $105 million.

Full Year 2020 Highlights

Our People

  • Spirit avoided involuntary furloughs of its U.S. unionized and non-unionized employees by providing voluntary leave programs and other cost saving initiatives. Due to the high level of support and acceptance of the voluntary programs offered, no unionized employees were involuntarily furloughed and the total number of non-unionized Team Members involuntarily separated as of October 1, 2020 was reduced by more than 95%;
  • Implemented a Human Rights Policy seeking to build human rights awareness among our Team Members and our Guests; and
  • Furthered its commitment to diversity by developing a comprehensive Diversity, Inclusion, Equity and Belonging Initiative to launch in 2021, to drive meaningful change within the organization. This includes a new Supplier Diversity program around a network of minority-owned business partners and diverse suppliers, as part of our strategic sourcing and procurement process.

Recognitions and Accomplishments

  • Spirit was one of only three U.S. airlines listed on FORTUNE’s 2021 list of World’s Most Admired® Companies;
  • Moved up one spot to 4th place in the 2020 edition of the Middle Seat Scorecard, the Wall Street Journal’s annual ranking of U.S. airlines by operational performance; and
  • For the full year 2020, Spirit expects it will be ranked 1st in Completion Factor2 and 3rd in on-time performance2 among DOT reporting carriers.

Guest Experience and Loyalty

  • Spirit implemented efforts to meet or exceed guidelines and rules published by the Centers for Disease Control (“CDC”). Spirit requires all Guests to complete a Health Acknowledgement at check-in, requires Guests and Team Members to wear face coverings throughout their journey, has implemented enhanced cleaning protocols, has updated airport and inflight procedures, and more;
  • Leveraged its technology-driven solutions like automated self-bag tagging and self-bag drop, minimizing face-to-face interaction and enabling Guests to self-serve their check-in experience;
  • Launched the nation’s first check-in experience powered by biometric photo-matching, debuting new protocols developed for domestic air travel;
  • Deployed bag scanning technology to reduce mishandled baggage occurrences and improve accuracy across all airports; and
  • Unveiled a redesigned Free Spirit® Loyalty Program with extended points expiration, additional benefits based on status, and other changes that began January 21, 2021. In addition, the new Spirit Saver$ Club®, formerly known as the $9 Fare Club™, expanded on existing fare discounts by providing savings on seats, shortcut boarding and security, and other options designed to make it the best value in the sky.

Supporting our Communities

  • Spirit helped more than 30,000 Guests return home to their families and loved ones under times of uncertainty due to the pandemic. In partnership with government officials in the U.S., Latin America, and the Caribbean, we organized and operated flights between U.S. and Colombia, Honduras, Panama, Aruba, Haiti, Ecuador, Costa Rica, the Dominican Republic and St. Martin;
  • Pledged $250,000 worth of airline travel to nine organizations across the U.S., advocating for social justice and civil rights;
  • The Spirit Airlines Charitable Foundation (the “Foundation”) raised over $1,000,000 in its annual fund raising efforts helping to support initiatives that include Aviation and STEM education scholarships and other education, family and military service projects throughout the communities it serves; and,
  • In addition, through the Foundation, Spirit contributed to efforts to address other needs in its communities. As part of its focus on supporting families, the Foundation partnered with other non-profit organizations including the YMCA and Jack and Jill Children’s Center to provide food to Seniors and families in need. Additionally, Spirit supported the production of face coverings for first responders and healthcare workers throughout the pandemic. The Company also raised funds for the American Red Cross, by selling face coverings to Guests at the gates and onboard our aircraft. Among many other initiatives to benefit the communities it serves, Spirit also partnered with Susan G. Komen Organization by raising funds through the sale of branded Breast Cancer Awareness scarves and ties with all proceeds benefiting the charities supported through the Foundation.

Measures Taken to Preserve Cash and Enhance Liquidity

In response to the COVID-19 pandemic crisis that drastically affected the Company’s original 2020 plan, Spirit took several steps to preserve and enhance its liquidity and to protect the long-term sustainability of the Company, including but not limited to, the following:

  • Reduced planned discretionary non-aircraft capital spend in 2020 by more than $70 million;
  • Reduced 2020 planned non-fuel operating costs by approximately $30 million excluding savings related to reduced capacity;
  • Entered into a two-year senior secured revolving credit facility in March 2020 (the “2022 RCF”). As of December 31, 2020, the available amount under the 2022 RCF was $180 million, which was fully drawn;
  • Completed the public offering of $175.0 million aggregate principal amount ($168.3 million in proceeds, net of issuance costs) of 4.75% convertible senior notes due 2025;
  • Completed a primary public offering of 20,125,000 shares of its voting common stock. The Company received proceeds of $192.4 million, net of issuance costs, from this stock offering;
  • Completed a private offering of an aggregate of $850 million principal amount of 8.00% senior secured notes due 2025, guaranteed by Spirit’s loyalty program and brand intellectual property. The Company received proceeds of $823.9 million, net of issuance costs, related to this private offering;
  • Completed the sale of 9,000,000 shares of its common stock pursuant to the at-the-market offering program entered into on July 22, 2020. The Company received proceeds of $156.7 million, net of issuance costs, from this program; and
  • Received $344.4 million in PSP funds through the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).

New Destinations

  • During 2020, Spirit launched new service to Barranquilla, Colombia; Bucaramanga, Colombia; Cap-Haitien, Haiti; and Orange County, California.

Spirit Airlines introduces a Brett Young Music logo jet on N932NK, will split its operations center

Spirit Airlines has introduced a new Brett Young Music logo jet (N932NK) to celebrate its new partnership with the artist and Mastercard.

The airline announced on social media:

We’re celebrating the new Free Spirit® with a free virtual concert in partnership with Mastercard at 8pm EST on February 4, 2021.

In other news, Spirit Airlines announced it will split its flight operations center at company headquarters in Miramar, moving 40 percent of its staff to a hurricane-hardened facility at Orlando International Airport according to the Orlando Sentinel.