Spirit Airlines, Inc. has reported its second quarter 2019 financial results.

“Our team once again delivered strong quarterly profits.  In the second quarter 2019, we improved our operating margin by 300 basis points and delivered very strong earnings growth.” said Ted Christie, Spirit’s President and Chief Executive Officer.  “Operationally, we experienced numerous storm systems across our network which negatively impacted our operational reliability.  However, on a relative basis, year-to-date through June 30, 2019 we still rank among the best in the industry for on-time performance².  I want to thank the entire Spirit team for all that they do every day to care for our Guests, especially during this busy travel season under challenging operational conditions.”

Revenue Performance
For the second quarter 2019, Spirit’s total operating revenue was $1,013.0 million, an increase of 18.9 percent compared to the second quarter 2018, driven by an 18.4 percent increase in flight volume and increases in both yields and load factor.

Total operating revenue per available seat mile (“TRASM”) for the second quarter 2019 increased 5.0 percent compared to the same period last year.  During the second quarter 2019, the Company’s results benefited from its strategic network changes, revenue management initiatives, and a strong underlying demand environment.  In addition, the Company estimates the calendar shift of Easter from the first quarter in 2018 to the second quarter in 2019 contributed approximately 200 basis points to the TRASM improvement.

Non-ticket revenue per passenger flight segment for the second quarter 2019 increased 1.8 percent to $55.54³.   Fare revenue per passenger flight segment decreased 1.0 percent to $57.60 and total revenue per passenger segment increased 0.3 percent year over year to $113.14.

Cost Performance
For the second quarter 2019, total GAAP operating expenses increased 14.2 percent year over year to $849.0 million.  Adjusted operating expenses for the second quarter 2019 increased 14.8 percent year over year to $847.5 million⁴.  These changes were primarily driven by higher flight volume, higher passenger re-accommodation expense, higher salaries, wages and benefits, and airport rent and landing fees.

Aircraft fuel expense increased in the second quarter 2019 by 7.6 percent year over year, due to a 15.4 percent increase in fuel gallons consumed.

Spirit reported second quarter 2019 cost per available seat mile (“ASM”), excluding operating special items and fuel (“Adjusted CASM ex-fuel”), of 5.41 cents⁴, up 4.6 percent compared to the same period last year.  As previously disclosed, a severe storm system impacted a large majority of Spirit’s flights to and from Florida during the Easter holiday weekend.  As a result, the Company canceled numerous flights and incurred costs of about $6 million for passenger re-accommodation and disrupted crew expense.  The additional expense and loss of ASMs related to this storm contributed approximately 150 basis points to adjusted CASM ex-fuel year over year percent change for the second quarter 2019.  In addition to the Easter storm, the Company experienced multiple storm-related flight disruptions throughout the rest of the quarter which drove additional passenger re-accommodation expense.  Higher ground handling rates, amortization expense, and other items contributed to the adjusted CASM ex-fuel change year over year.

Liquidity
Spirit ended the second quarter 2019 with unrestricted cash, cash equivalents, and short-term investments of $1.2 billion.  For the six months ended June 30, 2019, Spirit generated $341.0 million of operating cash flow, after investing $238.5 million, primarily for aircraft purchases and pre-delivery deposits.  Adjusted for proceeds from issuance of long-term debt, operating cash flow for the quarter ended June 30, 2019 was $205.2 million⁵.  For the six months ended June 30, 2019, net cash provided by financing activities was $3.5 million.

Fleet
Spirit took delivery of two new aircraft (one A320ceo and one A320neo) during the second quarter 2019, ending the quarter with 135 aircraft in its fleet.

End Notes
(1) See “Reconciliation of Adjusted Net Income, Adjusted Pre-tax Income, and Adjusted Operating    Income to GAAP Net Income” table below for more details.
(2) Preliminary data using DOT A:14 methodology.
(3) See “Calculation of Total Non-Ticket Revenue per Passenger Segment” table below for more details.
(4) See “Reconciliation of Adjusted Operating Expense to GAAP Operating Expense” table below for   more details.
(5) See “Reconciliation of Adjusted Free Cash Flow to GAAP Net Operating Cash Flow” table below for more details.

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Top Copyright Photo: Spirit Airlines Airbus A319-132 N512NK (msn 2673) LAX (Michael B. Ing). Image: 944944.

Spirit aircraft slide show:

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Spirit Airlines, the fastest growing airline in Las Vegas, continues its investment in the Entertainment Capital of the World with the addition of two new cities to the Spirit network: Burbank and Sacramento.

On June 20, Spirit launched nonstop flights between McCarran International Airport (LAS) in Las Vegas and Hollywood Burbank Airport (BUR) and Sacramento International Airport (SMF), each running three times daily.  Spirit will now have 55 daily departures from Las Vegas to 29 different destinations.

Routes from LAS (nonstop in black):

In partnership with McCarran International Airport, Spirit Airlines also debuted the airport’s first automated self-service bag drop system.  Located in the ticketing concourse of Terminal 1, it allows Guests to expedite their check-in experience by paying for and tagging their own bags on the airport’s kiosks. Travelers then proceed directly to newly installed automated bag belts to present their identification and drop their bags.  Automated self-service bag drop systems, widely adopted in Europe, highlight the airport and airline’s shared vision of allowing more Guests to customize and control their travel experience.

In addition to Sacramento and Burbank, Spirit will soon be adding Nashville to its network, which will include nonstop service to and from Las Vegas.  As of July 2019, Spirit will have grown nearly 50 percent in Las Vegas compared to its capacity only two years earlier.  The airline now employs more than 1,000 people in Las Vegas, and Spirit’s rapid expansion has created nearly 300 additional jobs in the last two years.

In other news, Spirit Airlines is kicking off service to Charlotte, North Carolina. Beginning on June 20, Spirit now offers nonstop daily flights from Charlotte Douglas International Airport (CLT) to Baltimore/Washington, Fort Lauderdale/Hollywood, Orlando and Newark.

Charlotte marks Spirit’s fourth destination in the Tar Heel State, joining the Piedmont Triad, Asheville, and Raleigh-Durham. These North Carolina additions to Spirit’s network have resulted in hundreds of new jobs in the state, while adding additional options to stimulate North Carolina tourism. By summer 2019, Spirit will have more than fifteen daily departures across the state.

Top Copyright Photo (all others by the airline): Spirit Airlines Airbus A319-132 N516NK (msn 2704) LAX (Michael B. Ing). Image: 945347.

Spirit Airlines aircraft slide show:

Spirit Airlines has announced it will soon serve its fourth destination in the Tar Heel State, Charlotte!

Beginning June 20, 2019, Spirit will begin nonstop daily service from Charlotte Douglas International Airport (CLT) to Baltimore/Washington, Fort Lauderdale/Hollywood, Orlando and Newark.

The carrier currently serves Asheville and Greensboro and will begin serving Raleigh-Durham on May 2.

In addition to Charlotte, Spirit recently announced it would begin serving Raleigh-Durham, Indianapolis, and Austin as well as expanding service in Jamaica and Puerto Rico.

Top Copyright Photo (all other images by the airline) (Spirit has revised its livery again with revised titles: Spirit Airlines Airbus A319-132 N516NK (msn 2704) LAX (Michael B. Ing). Image: 945346.

Spirit Airlines aircraft slide show:

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