Spirit Airlines (Fort Lauderdale/Hollywood) continues to make money under its ultra low-fare strategy. For the fourth quarter (up 43%) and the full year (up 33%), profits soar. The airline issued this statement:

Spirit Airlines, Inc.reported fourth quarter and full year 2014 financial results.

Adjusted net income for the fourth quarter 2014 increased 43.2 percent to $58.7 million ($0.80 per diluted share) compared to the fourth quarter 20131. GAAP net income for the fourth quarter 2014 increased 29.4 percent year over year to $55.9 million ($0.76 per diluted share).

Adjusted net income for the full year 2014 increased 33.3 percent year over year to $236.7 million ($3.23 per diluted share). GAAP net income for the full year 2014 increased 27.4 percent year over year to $225.5 million ($3.08 per diluted share).

Adjusted pre-tax margin for the fourth quarter 2014 was 19.7 percent, up 4.3 percentage points year over year. For the full year 2014, adjusted pre-tax margin was 19.2 percent, up 2.1 percentage points compared to 20131. On a GAAP basis, pre-tax margin for the fourth quarter 2014 was 18.8 percent and for the full year 2014 was 18.3 percent.

Spirit ended 2014 with an unrestricted cash and cash equivalents balance of $632.8 million.
Spirit’s return on invested capital (before taxes and excluding special items) for the twelve months ended December 31, 2014 was 30.1 percent.

Revenue Performance

For the fourth quarter 2014, Spirit’s total operating revenue was $474.5 million, an increase of 13.0 percent compared to the fourth quarter 2013, driven by an increase in flight volume.

Total revenue per available seat mile (“RASM”) for the fourth quarter 2014 decreased 5.1 percent compared to the fourth quarter 2013 on a capacity increase of 18.9 percent. The decrease was driven by a mix of lower passenger yields and a 1.4 point decline in load factor.

Total revenue per passenger flight segment (“PFS”) for the fourth quarter 2014 decreased 3.7 percent year over year to $127.91, driven by a 6.1 percent decrease in ticket revenue per PFS and a 0.3 percent decrease in non-ticket revenue per PFS. During the fourth quarter, the Company transitioned its onboard catering to a third-party provider under a revenue share agreement. As a result of this change, in the fourth quarter 2014, the Company recorded lower non-ticket revenue and correspondingly lower costs than it would have otherwise.

Cost Performance

Total operating expenses for the fourth quarter 2014, excluding $4.5 million of special items3, increased 6.9 percent to $380.0 million. Including special items, total operating expenses increased 9.3 percent year over year to $384.5 million.

Spirit reported fourth quarter 2014 cost per available seat mile (ASM) excluding special items and fuel (“Adjusted CASM ex-fuel”)3 of 5.61 cents, a decrease of 2.9 percent compared to the same period last year driven in part by lower distribution expense, maintenance expense, and aircraft rent per ASM. Distribution expense per ASM in the fourth quarter 2014 was lower compared to the same period last year primarily due to a one-time litigation settlement gain of approximately $2.9 million and a larger percentage of tickets being booked directly through spirit.com, the Company’s lowest cost distribution channel. The decrease in maintenance expense per ASM year over year was driven by an expense reversal in the fourth quarter 2014 associated with an insurance claim, along with a one-time $750,000 insurance deductible expense in the fourth quarter 2013. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (amortization recorded under depreciation and amortization) aircraft.

Copyright Photo: Brian McDonough/AirlinersGallery.com. In the fourth quarter 2014, Spirit took delivery of seven new Airbus A320 aircraft, ending the year with 65 aircraft in its fleet. In addition, during 2014, the low fare carrier went to this highly visible “Home of the Bare Fare’ canary yellow color scheme. Airbus A319-132 N502NK (msn 2433) lands at the Fort Lauderdale-Hollywood International Airport base which now enjoys two parallel jet runways.

Spirit Airlines aircraft slide show: