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Spirit Airlines reports second quarter 2019 results

No Longer with "Home of the Bare Fare" on engines

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

Second Quarter 2019 Second Quarter 2018
As Reported Adjusted As Reported Adjusted
(GAAP) (non-GAAP)1 (GAAP) (non-GAAP)1
Revenue $1,013.0 million $1,013.0 million $851.8 million $851.8 million
Operating Income (loss) $163.9 million $165.5 million $108.5 million $113.3 million
Operating Margin  16.2%  16.3%  12.7%  13.3%
Net Income (loss) $114.5 million $115.7 million $11.3 million $75.7 million
Diluted EPS $1.67 $1.69 $0.16 $1.11

“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.

See more

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 adds new routes from Raleigh/Durham

Spirit Airlines Airbus A319-132 N512NK (msn 2673) LAX (Michael B. Ing). Image: 945308.

Spirit Airlines has announced new service to and from Raleigh/Durham.

Beginning May 2, 2019, Spirit will launch nonstop daily service from Raleigh-Durham International Airport (RDU) to Baltimore/Washington, Boston, Chicago, Detroit, Fort Lauderdale/Hollywood, New Orleans, and Orlando.

Raleigh-Durham, NC (RDU) to/from: Starts: Frequency:
Baltimore, MD/Washington, DC (BWI) May 2, 2019 2x daily, year-round
Boston, MA (BOS) May 2, 2019 Daily, year-round
Chicago, IL (ORD) May 2, 2019 Daily, year-round
Detroit, MI (DTW) May 2, 2019 Daily, year-round
Orlando, FL (MCO) May 2, 2019 Daily, year-round
Fort Lauderdale, FL (FLL) May 2, 2019 Daily, year-round
New Orleans, LA (MSY) May 2, 2019 Daily, year-round

Along with the new service to and from Raleigh-Durham, Spirit is also announcing two additional routes set to roll-out at the same time.  Starting May 2, Spirit will begin daily nonstop seasonal service between Atlanta and Denver.  Then on May 23, the airline will launch daily nonstop service between Philadelphia and San Juan, Puerto Rico.  These additional routes will only strengthen Spirit’s domestic and Caribbean service.

Route: Starts: Frequency:
Atlanta, GA (ATL) – Denver, CO (DEN) May 2, 2019 Daily, seasonal
(Runs 5/2/19 – 9/4/19)
Philadelphia, PA (PHL) – San Juan, PR (SJU) May 23, 2019 Daily, year-round

It also comes after Spirit announced it would begin serving Austin, Texas and Indianapolis, Indiana in early 2019, and is adding more nonstop flights from Jacksonville, Florida; Myrtle Beach, South Carolina; New Orleans, Louisiana; and San Juan, Puerto Rico.  The airline is also in the process of installing state-of-the-art high-speed satellite-based Wi-Fi to its entire fleet.

Top Copyright Photo (all others by the airline): Spirit is removing “Home of the Bare Fare” from its 2014 yellow livery. Spirit Airlines Airbus A319-132 N512NK (msn 2673) LAX (Michael B. Ing). Image: 945308.

Spirit Airlines aircraft slide show:

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