Category Archives: Spirit Airlines

ALC announces lease placement of 10 new Airbus A321-200neos and sale and lease-back of 5 new Airbus A320-200neos with Spirit Airlines

Spirit Airlines Airbus A320-271N WL N927NK (msn 9075) LAX (Michael B. Ing). Image: 954948.

Air Lease Corporation (ALC) has announced long-term lease placements for ten new Airbus A321-200neo aircraft and sale and lease-backs of five new Airbus A320-200neo aircraft with Spirit Airlines.

The five A320neos are scheduled to deliver to Spirit Airlines in 2021 and 2022 and will be owned by one of ALC’s managed aircraft ventures through funds managed by Waterfall Asset Management.

The ten A321neos are scheduled to be delivered to Spirit Airlines from ALC’s order book with Airbus beginning in 2023 through 2024.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N927NK (msn 9075) LAX (Michael B. Ing). Image: 954948.

Spirit Airlines aircraft slide show:

Spirit Airlines says canceled flights cost it $50 million, hurt bookings

From the Associated Press:

“Spirit Airlines said Monday the cancellation of more than 2,800 flights over an 11-day stretch this summer cost the budget airline about $50 million in lost revenue and caused spending to soar.”

Read the full report:

https://www.msn.com/en-us/travel/news/spirit-airlines-says-canceled-flights-cost-it-2450-million-hurt-bookings/ar-AANoy1d?ocid=BingNewsSearch

Spirit Airlines CEO Ted Christie apologizes for all of the cancellations

Spirit Airlines CEO Ted Christie has apologized for around 1,800 cancellations this week stranding passengers.

He blamed staffing shortages, technology problems and a surge in travel for the cancellations.

More from CNBC:

https://www.cnbc.com/2021/08/06/spirit-airlines-ceo-on-what-caused-the-carriers-meltdown.html

NBC News: Mayhem for airline passengers and crew as ‘hot vax summer’ turns into ‘hot mess’

The summer of “Vax Happiness” for U.S. airlines with renewed bookings is turning into an operations challenge for some airlines, especially for Spirit Airlines and American Airlines.

From NBC News:

https://www.nbcnews.com/business/business-news/mayhem-airline-passengers-crew-hot-vax-summer-turns-hot-mess-n1275947

Message from Spirit Airlines on social media:

Spirit Airlines experiences a third day of cancellations

More problems for Spirit Airlines – a third day of major cancellations – over 690 flights cancelled nationwide since Monday. From the SunSentinel in Fort Lauderdale:

Spirit Airlines slammed for third straight day, canceling more than half its flights (msn.com)

Spirit Airlines loses $287.9 million in the second quarter, will fly to Tegucigalpa

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

Ended the second quarter 2021 with $2.2 billion of unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility

As Reported

Second Quarter 2021    

Second Quarter 2020

Second Quarter 2019

Total Operating Revenues

$859.3 million

$138.5 million

$1,013.0 million

Pre-tax Income (Loss)

$(273.3) million

$(212.5) million

$148.6 Million

Net Income (Loss)

$(287.9) million

$(144.4) million

$114.5 million

Diluted Earnings (Loss) Per Share

$(2.73)

$(1.81)

$1.67

Adjusted1 Second

Second Quarter 2021

Quarter 2020

Second Quarter 2019

Adjusted EBITDA

$62.1 million

$(273.2) million

$220.4 million

Adjusted EBITDA Margin

7.2%

(197.2)%

21.8%

Adjusted Pre-tax Income (Loss)

$(44.7) million

$(364.4) million

$150.1 million

Adjusted Net Income (Loss)

$(36.3) million

$(285.8) million

$115.7 million

Adjusted Net Income (Loss) Per Share, Diluted

$(0.34)

$(3.59)

$1.69

“I thank our Team Members for their outstanding efforts as we work toward bringing our level of operations up to full utilization. In June 2021, we recorded our first month with adjusted net earnings since the onset of the COVID-19 pandemic. Due to our strategic execution and improving demand backdrop, our second quarter 2021 financial results were among the best in the industry,” said Ted Christie, Spirit’s President and Chief Executive Officer. “We remain very well-positioned to stimulate markets and capture the significant market opportunities in the domestic U.S. and near-field international marketplace.”

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. 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 June 30, 2021 for additional disclosures regarding these measures.

The Company believes that providing analysis of financial and operational performance compared to second quarter 2019 is a more relevant measure of performance due to the severe impacts from the COVID-19 pandemic on our financial results and operational performance for 2020.

Capacity and Operations
Load factor for the second quarter 2021 was 84.4 percent, down 0.6 percentage points compared to the second quarter 2019. Capacity for the second quarter 2021 was down 5.1 percent compared to the second quarter 2019.

During the second quarter 2021, numerous weather systems impacted the Company’s network. Despite the adverse weather conditions, Spirit maintained its strong operational reliability and achieved a DOT on-time performance2 of 78.3 percent and a Completion Factor2 of 99.3 percent.

Revenue Performance
Total operating revenues for the second quarter 2021 were $859.3 million, a decrease of 15.2 percent versus second quarter 2019. Although load factors for the second quarter 2021 were in line with pre- pandemic levels, total operating yields were down 10.0 percent compared to the second quarter 2019. However, demand trends in Spirit’s domestic and international markets saw marked improvement as the second quarter 2021 progressed such that June 2021 operating yields were about flat compared to June 2019. Compared to the first quarter 2021, improvement in operating yields helped to drive an 86.3 percent sequential improvement in total revenues relative to only a 28 percent increase in capacity.

For the second quarter 2021, total revenue per passenger flight segment (“Segment”) decreased 9.4 percent compared to the same period in 2019 to $102.48. Fare revenue per Segment decreased 23.5 percent compared to the second quarter 2019 to $44.09. The Company continues to drive improvements in non-ticket revenue per Segment. Non-ticket revenue per Segment increased $2.85 compared to the second quarter 2019 to $58.393. Enhanced product offerings, improved merchandising and realized benefits from revenue management contributed to these results.

Cost Performance
For the second quarter 2021, total GAAP operating expenses decreased 9.8 percent compared to the second quarter 2019 to $766.1 million, primarily due to the grant component of the funding received through the payroll support program (further discussed below). Adjusted operating expenses for the second quarter 2021 increased 2.6 percent compared to the second quarter 2019 to $869.2 million4. Excluding fuel, adjusted operating expenses came in better than expected primarily due to a) strong operational performance resulting in better crew utilization and less passenger disruption expense; b) airport use fees increasing at a slightly slower rate than initially assumed as the industry returned capacity to the marketplace; and c) timing of events. Compared to the second quarter 2019, adjusted operating expenses excluding fuel increased 12.3 percent4, driven primarily by higher salaries, wages and benefits, higher depreciation and amortization, and higher landing fees and other rents. Compared to the second quarter 2019 the increase in salaries, wages and benefits was primarily driven by a 24 percent increase in the number of pilots, a 14 percent increase in the number of flight attendants, and inflationary rate pressures. Higher depreciation and amortization expense compared to the second quarter 2019 was driven by the purchase of additional aircraft and the amortization of heavy maintenance events. Additionally, the increase in landing fees and other rents was due to higher average rates, driven by inflationary pressures as well as increased market share at certain airports where other airlines have decreased flying due to the impact of COVID-19 on demand.

“I want to thank our team members for taking care of our Guests by running a great airline this quarter. As we have begun to ramp the airline for growth, our team has once again proven to be up to the challenge. With our strategic deployment of assets, an improving demand environment and our strong operational results, we were one of the few airlines to produce positive adjusted EBITDA in the second quarter. We continue to be emboldened by the value of the ultra-low-cost model, our valuable network, and our strong operational performance,” said Scott Haralson, Spirit’s Chief Financial Officer. “These pillars create a strong platform for us to continue to drive sustainable, long-term value for our shareholders.”

The arrival of N944NK:

Fleet
Spirit took delivery of five new A320neo aircraft during the second quarter 2021, three of which were financed through direct operating leases, and two under sale lease back transactions. In addition, the Company purchased two A319ceo aircraft off lease. The Company ended the quarter with 164 aircraft in its fleet.

Liquidity and Capital Deployment
Spirit ended second quarter 2021 with unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility of $2.2 billion.

Total capital expenditures for the second quarter 2021 were approximately $168 million, primarily related to pre-delivery deposits associated with future aircraft deliveries and the purchase of two A319 aircraft off lease.

To improve its liquidity and financial position, during the second quarter 2021, the Company entered into a series of liability management transactions given the favorable market dynamics:

  • The Company completed a registered direct placement of 10,594,073 shares of its common stock to holders of its 4.75% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) at a price of $35.05 per share for aggregate net proceeds of $370.8 million. Spirit used $368.7 million of the net proceeds from the offering to redeem $340.0 million aggregate principal amount of its $850.0 million of 8.00% Senior Secured Notes due 2025 (“8.00% Senior Secured Notes”), at a premium of $27.2 million plus accrued and unpaid interest of $1.5 million. As a result, $510.0 million in 8.00% Senior Secured Notes remain outstanding. In connection with this debt extinguishment, the Company recorded $36.4 million within loss on extinguishment of debt on its condensed consolidated statement of operations in second quarter 2021. This amount includes the $27.2 million in premiums paid to early extinguish the debt, $6.1 million for the write-off of related deferred financing costs and $3.1 million for the write-off of the related original issuance discount.
  • The Company issued $500.0 million aggregate principal amount of 1.00% Convertible Senior Notes due 2026 (the “2026 Convertible Notes”) for aggregate net proceeds of $486.8 million. Net proceeds from this transaction were used to repurchase $146.8 million aggregate principal amount of the 2025 Convertible Notes, for a premium of $290.7 million plus accrued and unpaid interest of $3.2 million. As a result, $28.2 million aggregate principal amount of the 2025 Convertible Notes remain outstanding. In connection with this debt extinguishment, the Company recorded $295.2 million within loss of extinguishment of debt on its condensed consolidated statement of operations in second quarter 2021. This amount includes the $290.7 million in premiums paid to early extinguish the debt and $4.5 million for the write-off of related deferred financing costs.
  • Additionally, the Company repaid all outstanding indebtedness under its Senior Secured Revolving Credit Facility (the “Revolver”) due March 2024. As of June 30, 2021, the Company had no outstanding indebtedness under its Revolver which has a total of $240 million in available capacity.

As previously disclosed, as part of the extension of the payroll support program (the “PSP3”) under Title VII, Subtitle C of The American Rescue Plan of 2021, on April 29, 2021, Spirit entered into a new payroll support program agreement with the United States Department of the Treasury (“Treasury”), pursuant to which the Company received a total of $197.9 million to be used exclusively to pay for salaries, wages and benefits for the Company’s Team Members through September 30, 2021. Of that amount, $29.4 million is in the form of a low-interest 10-year loan. In connection with the Company’s participation in the PSP3, on June 3, 2021, the Company issued a warrant to the U.S. Treasury to purchase up to 80,539 shares of the Company’s common stock, (the “Warrant”), in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The Warrant may be exercised at an exercise price of $36.45 at any time prior to the fifth anniversary of its issuance. The remaining amount of $167.0 million, net of related costs, is in the form of a grant of which $80.6 million was recognized in special credits in the Company’s condensed consolidated statement of operations and $86.4 million remains within deferred salaries, wages and benefits in the Company’s consolidated condensed balance sheet as of June 30, 2021. Total warrants issued in connection with the PSP, PSP2 and PSP3 represent less than 1.0 percent of the outstanding shares of the Company’s common stock as of June 30, 2021. In addition, on April 29, 2021, the Company received an additional $27.7 million pursuant to the PSP2 program.

Tax Rate
On a GAAP basis, the Company’s effective tax rate for the second quarter 2021 was (5.3) percent, materially lower than the Company’s historic average GAAP tax rate. This lower-than-usual GAAP tax rate was primarily driven by an unfavorable permanent tax adjustment related to the repurchase of a portion of the Company’s 2025 Convertible Notes during the quarter. This unfavorable permanent tax adjustment, along with other special items, were excluded in calculating the Company’s non-GAAP tax rate of 18.9 percent.

In other news, the company today announced it will add new service to Tegucigalpa as the first commercial carrier to fly to the newly-established Palmerola International Airport (XPL).

Flights will start in November.

Spirit Airlines to resume all remaining international service from Orlando

Spirit Airlines today announced plans to offer more than 80 departures per day at MCO by the end of 2021.

The company unveiled the largest schedule it has ever operated from Orlando, including new flights to destinations stretching from New Hampshire to the Dominican Republic along with reinstating the balance of its international operation.

Spirit confirmed plans to restore pre-pandemic flights to Cartagena, Colombia (CTG); Guatemala City, Guatemala (GUA); Montego Bay, Jamaica (MBJ); Port-au-Prince, Haiti (PAP) and San Salvador, El Salvador (SAL) while increasing San Jose, Costa Rica (SJO) to daily service. The airline’s full reinstatement of its international schedule comes on the heels of a complete reactivation of its domestic network from MCO that was finished in time for the summer travel season. New domestic options include Louisville (SDF); Manchester, N.H. (MHT); Miami (MIA); Milwaukee (MKE) and St. Louis (STL).

Spirit Airlines New & Resumed Service at MCO: 

Destination:              

Flights Available:  

Effective:  

Cancun (CUN) NEW     

Daily         

Immediately

Louisville (SDF) NEW  

Daily          

Immediately

Milwaukee (MKE) NEW  

Daily         

Immediately

Punta Cana (PUJ) NEW  

3x per week  

Immediately

Santo Domingo (SDQ) NEW  

4x per week   

Immediately

St. Louis (STL) NEW     

Daily           

Immediately

Manchester, NH (MHT) NEW 

Daily       

Oct. 7, 2021

Miami (MIA) NEW   

Daily       

Nov. 17, 2021

Cartagena (CTG) RESUMING   

2-3x per week  

Sep. 10, 2021

Guatemala City (GUA) RESUMING  

4x per week   

Sep. 9, 2021

Montego Bay (MBJ) RESUMING  

3x per week

Sep. 9, 2021

Port-au-Prince (PAP)* RESUMING  

3x per week

Nov. 18. 2021

San Salvador (SAL) RESUMING   

3x per week

Nov. 19, 2021

San Jose, CR (SJO) MORE FLIGHTS  

Increases to daily

Nov. 17, 2021

Altogether, Spirit Guests will have roughly 20 additional flights and 10 new destinations to choose from each day compared to two years ago. The airline’s Orlando operations will be 45 percent larger than they were at the end of 2019 once the new routes and resumptions come online.

Spirit’s Investment in Orlando

Spirit’s growth at Orlando International makes it the airport’s largest international airline and second largest airline overall, which means more jobs at the airport and behind the scenes.

  • Last month the airline opened its second Operations Control Center (OCC), which brings another 75 positions to Orlando and joins an existing South Florida facility that manages the flow of planes throughout the carrier’s network 365 days a year. The Orlando OCC joins Spirit’s existing crew base and state-of-the-art inflight training facility at MCO.
  • 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 is welcoming Guests back to MCO with a refreshed ticket lobby featuring a bold new look and digital signage to help international and domestic travelers find the right check-in counter quickly. The airline worked with Synect Media to update the space and ensure a smooth journey from curb to gate as it continues to grow in Orlando.

Spirit Airlines touches down in Milwaukee, announces new routes

Spirit Airlines’ bright yellow planes touched down in Milwaukee for the first time today—carrying good news for travelers and a special gift for one of the region’s most revered charitable organizations.

The airline announced more nonstop routes coming soon to Milwaukee Mitchell International Airport (MKE) during its inaugural celebration and presented a donation to the Ronald McDonald House Charities of Eastern Wisconsin.

Spirit will nearly triple the destinations it serves nonstop from MKE starting this fall. The carrier plans to add daily flights to Fort Lauderdale (FLL), Fort Myers (RSW), Phoenix (PHX), and Tampa (TPA), plus three weekly flights to Cancun (CUN), the airline’s first international route from Milwaukee.

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 

Fort Lauderdale (FLL) NEW

Daily 

Nov. 17, 2021

Fort Myers (RSW) NEW

Daily 

Nov. 17, 2021

Phoenix (PHX) NEW

Daily 

Nov. 17, 2021

Tampa (TPA) NEW

Daily 

Nov. 17, 2021

Cancun (CUN) NEW

3x per week

Dec. 23, 2021

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.