Tag Archives: Spirit Airlines

Spirit Airlines reports first quarter $27.8 million loss, fleet grows to 151 aircraft

Spirit Airlines, Inc. reported first quarter 2020 financial results.  These results reflect the adverse impact of the material decline in demand for both international and domestic travel resulting from the spread of novel coronavirus (COVID-19).

First Quarter 2020 First Quarter 2019
As Reported Adjusted As Reported Adjusted
(GAAP) (non-GAAP)1 (GAAP) (non-GAAP)1
Revenue $771.1 million $771.1 million $855.8 million $855.8 million
Pre-tax Income (Loss) $(74.6) million $(74.6) million $72.1 million $74.0 million
Pre-tax Margin (9.7)% (9.7)% 8.4% 8.6%
Net Income (Loss) $(27.8) million $(58.9) million $56.1 million $57.5 million
Diluted Earnings (Loss) Per Share $(0.41) $(0.86) $0.82 $0.84

Prior to March 2020, the Company was on track to meet or beat its first quarter 2020 pre-tax margin guidance of 6.5 percent to 7.5 percent.  However, beginning with the second week of March through the end of the month, load factors and yields declined significantly as events across the U.S. were canceled, theme parks closed, and travel restrictions were implemented and broadened, resulting in a significant drop in passenger demand and bookings.

“The health crisis, loss of demand, and corresponding economic impact caused by COVID-19 is unprecedented.  I want to thank all of our Team Members for their dedication to the safety and well-being of our Guests and each other, and for pulling together to help the Company meet the financial challenges we are facing.  I am very proud of the Spirit team and I am confident that given our quick action to adjust, our industry-leading low-cost structure, our strong balance sheet, and the resiliency and commitment of our Team Members, we will emerge from this crisis ready to deliver on our promise of high quality and low fares,” said Ted Christie, Spirit’s President and Chief Executive Officer.

In response to COVID-19, the Government approved a financial stabilization assistance package through the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  Spirit commends President Trump, the Administration and members of Congress, for their support of the airline assistance programs included in the CARES Act.  The benefits under the CARES Act help to position Spirit to support the economic recovery in the destinations it serves by continuing to provide low fare air travel to millions of Guests annually.

COVID-19 Response

Capacity Reductions, Expense Management, and Liquidity Measures

In response to government restrictions on travel and drastically reduced consumer demand compared to its original 2020 plan, Spirit has taken many steps to reduce costs and to preserve and enhance liquidity, including:

  • Reduced capacity for April 2020 by approximately 75 percent, and for May and June by approximately 95 percent.  However, the situation is very fluid and actual capacity adjustments may be different than what the Company currently expects;
  • Entered into a senior secured revolving credit facility (“RCF”) for an initial commitment amount of $110 million (with an option to increase overall commitment amount up to $350 million with the consent of any increasing lenders).  The RCF commitment was recently increased to $135 million, which was fully drawn during the month of April 2020.  In May, we received a commitment to increase the RCF by $30 million to $165 million effective May 18, 2020, subject to the satisfaction of certain conditions precedent;
  • Reduced planned discretionary capital spend in 2020 by approximately $50 million. The Company also is in discussions with Airbus to defer some 2020 and 2021 aircraft deliveries and related pre-delivery payments.  The Company expects to reduce aircraft-related capital spend by approximately $185 million if those discussions are successful;
  • Reduced 2020 planned non-fuel operating costs by $20 million to $30 million, excluding savings related to reduced capacity;
  • Suspended hiring across the Company except to fill essential roles;
  • Engaged in discussions with the Company’s significant stakeholders and vendors regarding financial support or contract adjustments, including extensions of payment terms, during this transition period;
  • Worked with our unionized and non-unionized Team Members to create voluntary leave programs;
  • Entered into a Payroll Support Program Agreement (“PSP”) with the U.S. Department of the Treasury pursuant to which the Company expects to receive a total of approximately $335 million in 2020 over the course of the second and third quarters.  The PSP funds will be used exclusively to pay for salaries and benefits for the Company’s Team Members, and the receipt of the funds will subject us to certain ongoing restrictions;
  • Applied for a loan from the Treasury under the CARES Act (“Loan Program”).  Spirit’s maximum potential availability under the Loan Program is approximately $741 million.  However, it is dependent on the amount and types of collateral accepted, which may result in an actual loan less than $741 million, if the Company accepts the loan.  Over the next several months, the Company will be evaluating whether to take advantage of this government assistance.  The Company also expects to realize significant liquidity benefits associated with the income and federal excise tax relief provisions in the CARES Act up to approximately $180 million during the current year.  In addition, the CARES Act provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50 percent of the deferred amount due December 31, 2021 and the remaining 50 percent due December 31, 2022. This is expected to provide the Company with approximately $24 million of additional liquidity during the current year; and
  • In connection with its participation in the PSP, the Company also will be obligated to issue to Treasury warrants to purchase up to 500,150 shares of common stock of the Company, par value $0.0001 per share (“Common Stock”), at a strike price of $14.08 per share (the closing price for the shares of Common Stock on April 9, 2020).  The Company also would be required to issue to Treasury a number of warrants equal to 10% of the final loan principal amount divided by the same strike price as noted above ($14.08), representing a potential conversion of up to 5.3 million of underlying shares of Common Stock.

Additionally, Ted Christie, the Company’s President and Chief Executive Officer, has temporarily reduced his base salary by 30 percent.  All Senior and Executive Vice Presidents and members of the Board of Directors have temporarily reduced their compensation as well.

The Company anticipates it may implement further discretionary changes and other cost reduction and liquidity preservation measures as needed, in order to address the volatility and rapidly-changing dynamics of passenger demand and the impact of revenue changes, regulatory and public health directives, and prevailing government policy and financial market conditions.  There is no guarantee that we receive all or any of the benefits we expect to receive under the CARES Act.

Caring for Guests and Team Members

Safety is always the Company’s top priority.  Since the COVID-19 outbreak, the Company’s Operations and Task Force teams remain in constant contact with authorities, continuing to evolve its response to ensure the safety of Guests and Team Members.  In addition to existing procedures including utilization of hospital-grade disinfectants and state-of-the art High-Efficiency Particulate Air (“HEPA”) filters that capture 99.97 percent of airborne particles, the Company has taken other protective measures including:

  • Secured and distributed additional supplies of gloves and sanitizer across the network and augmented the contents of onboard supply kits;
  • Expanded cleaning protocols at airports and other facilities, including the use of electrostatic sprayers at select locations;
  • Expanded aircraft turn and overnight cleaning protocols focusing on high frequency touch points as well as enhanced cockpit cleaning;
  • Launched a new aircraft fogging program to provide additional disinfecting;
  • Offering complimentary re-seating to provide additional distancing between Guests;
  • Offering future flight credits with extended expiration dates to Guests with impacted travel plans;
  • Leveraging its technology-driven solutions like automated self-bag drop and self-bag tagging to allow for contactless check-in; and
  • Announced a new policy requiring all Guests and Guest-facing Team Members to wear a face covering when traveling through the airport and while onboard the aircraft.

Supporting Communities

As bans on travel were implemented with little notice, many travelers became stranded abroad.  Spirit has operated specially approved flights for stranded travelers in Aruba, Colombia, Dominican Republic, Haiti, Panama, and the U.S.  Thus far, Spirit has provided transportation to more than three thousand stranded travelers, and preparations are ongoing to transport hundreds more home in the coming days.

Spirit has also made efforts to address the growing needs of its communities through The Spirit Airlines Charitable Foundation (the “Foundation”).  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 struggling during this time and supported organizations with the fabrication of face masks for healthcare workers.

First Quarter 2020

Revenue Performance
For the first quarter 2020, Spirit’s total operating revenue was $771.1 million, a decrease of 9.9 percent compared to the first quarter 2019.

Total operating revenue per available seat mile (“TRASM”) for the first quarter 2020 decreased 18.8 percent compared to the same period last year.

The year-over-year decrease in total operating revenue and TRASM for the first quarter 2020 was driven by the significant drop in load factor and yields as a result of COVID-19.

Cost Performance
For the first quarter 2020, total GAAP operating expenses increased 8.0 percent year over year to $829.1 million.  Adjusted operating expenses for the first quarter 2020 increased 8.2 percent year over year to $829.1 million2.  An increase in flight volume of 11.5 percent and higher depreciation and amortization were the primary drivers of these additional expenses.

Aircraft fuel expense in the first quarter 2020 decreased by 7.2 percent year over year, on a 7.4 percent increase in fuel gallons consumed, due to a 13.4 percent drop in average fuel cost per gallon.

Spirit reported first quarter 2020 cost per available seat mile (“ASM”), excluding operating special items and fuel (“Adjusted CASM ex-fuel”), of 5.64 cents2, an increase of 3.3 percent compared to the same period last year, which was modestly better than expected on lower-than-planned capacity growth. On a per ASM basis, the largest driver of the year-over-year increase was salaries, wages and benefits as the Company had commitments to pay its unionized Team Members at a guaranteed volume greater that what it actually operated as a result of COVID-19.  Higher depreciation and amortization and other operating expense per ASM also contributed to the increase.

Liquidity and Capital Deployment
Spirit ended the first quarter 2020 with unrestricted cash, cash equivalents, and short-term investments of $894.4 million and an undrawn $110.0 million revolver.  On April 20, 2020, the revolver commitment was increased to $135 million, which was fully drawn during the month of April 2020.  In May, we received a commitment to increase the RCF by $30 million to $165 million effective May 18, 2020, subject to the satisfaction of certain conditions precedent.

Also on April 20, 2020, the Company entered into a PSP with the U.S. Department of the Treasury pursuant to which the Company expects to receive a total of approximately $335 million.  In April, the Company received $167 million of the PSP funds and expects to receive the balance of funds by July 2020. The PSP funds will be used exclusively to pay for salaries and benefits for the Company’s Team Members, and subject us to certain ongoing restrictions.  We expect to meet our cash needs for the next twelve months with cash and cash equivalents, financing arrangements, government assistance under the CARES Act, and cash flows from operations.

Operating activities in the three months ended March 31, 2020 provided $35 million in cash.  Capital expenditures during the first quarter 2020 were $195.4 million, partially offset by proceeds from issuance of long-term debt of $169.0 million related to aircraft purchases. The company took delivery of a total of six aircraft during the quarter; four of these were debt-financed and two were secured with direct operating leases.  The Company also purchased two aircraft off-lease resulting in payments of finance lease obligations of $24.8 million.  Debt payments during the first quarter 2020 were $62.9 million (principal, interest and fees).  Also during the first quarter 2020, the Company made pre-delivery payments of $123 million, and $2.9 million of capitalized interest for future deliveries of aircraft and spare engines.

“The rapid change in the economic environment and the substantial reduction in passenger demand led us to take quick and decisive actions to cut costs, preserve capital, and raise additional liquidity.  This is an unprecedented turn of events for Spirit and the entire airline industry, and I want to thank our Spirit team and let them know I appreciate their hard work and dedication to help preserve Spirit’s future.  We entered the crisis with a strong liquidity position and healthy balance sheet which will benefit us as we manage through low travel demand period,” said Scott Haralson, Spirit’s Chief Financial Officer.  “We estimate our current average daily cash burn rate3 is about $4 million and we are evaluating initiatives to further reduce that amount should demand not begin to rebound in the coming months. While we still have a lot of work ahead of us, I am confident that together we will leverage our resources and tools to reinforce our balance sheet and put us in the best position to navigate the economic downturn and prepare for the recovery period.”

As of March 31, 2020, we had approximately $900 million of unencumbered assets. As of April 30, 2020, approximately $250 million of these assets were pledged under the 2022 Revolving Credit Facility, leaving approximately $650 million of assets unencumbered, primarily consisting of aircraft.

In response to the impact from COVID-19, the Company has reduced planned discretionary capital spend in 2020 by approximately $50 million. The Company also is in discussions with Airbus to defer some 2020 and 2021 aircraft deliveries and related pre-delivery payments.  For comparison purposes, on February 5, 2020, the Company filed an 8-K in which it estimated purchase of property and equipment and net pre-delivery deposits (aircraft-related capital expenditures) would be approximately $710 million for 2020 and other capital expenditures would be approximately $110 million for 2020.

In addition to reducing its planned capital expenditures, the Company has deferred approximately $20 million of heavy maintenance events from 2020 to 2021.

Fleet
Spirit took delivery of six new Airbus A320neo aircraft during the first quarter 2020, ending the quarter with 151 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)  See “Reconciliation of Adjusted Operating Expense to GAAP Operating Expense” table below for more details.
(3)  Estimated average daily cash burn rate is calculated as the sum of operating cash outflows, debt service, fleet capex net of financing and pre-delivery deposit payments which estimate has been based upon historical data for the months of March, April and May 2020.  It does not include the impact of any financings, capital raises, or the funds from PSP.

Spirit Airlines aircraft photo gallery:

Spirit Airlines expands efforts to bring Americans home with more humanitarian flights from Caribbean and Latin America

Spirit Airlines has made this announcement:

More than 1,300 people who were struggling to return to the United States from Colombia, Panama, Haiti, Aruba, the Dominican Republic, and Honduras are finally coming home, Spirit Airlines announced Wednesday. Over the past 13 days, the airline has organized flights to all six countries to pick up U.S. citizens, residents and family members who have been in limbo since flight restrictions went into effect in mid-March.

The announcement comes after weeks of careful coordination with U.S. embassies and local governments to obtain an exemption to those restrictions on international flights. Based in South Florida, Spirit is proud serve its Guests as a gateway to Latin America and the Caribbean, and the airline has already flown a total of eight flights bringing people back to the United States. The airline plans to operate additional flights based on embassy requests.

Flight Details
Route: Date:
Bogota (BOG) – Fort Lauderdale (FLL) Thur. April 2
Bogota (BOG) – Fort Lauderdale (FLL) Mon. April 6
Medellin (MDE) – Cartagena (CTG) – Fort Lauderdale (FLL) Mon. April 6
Cali (CLO) – Bogota (BOG) – Fort Lauderdale (FLL) Thur. April 9
Panama City (PTY) – Fort Lauderdale (FLL) Sat. April 11
Port-au-Prince (PAP) – Fort Lauderdale (FLL) Sat. April 11
Aruba (AUA) – Cartagena (CTG) – Fort Lauderdale (FLL) Wed. April 15
Bogota (BOG) – Fort Lauderdale (FLL) Wed. April 15
Cali (CLO) – Medellin (MDE) – Fort Lauderdale (FLL) Thur. April 16
Santo Domingo (SDQ) – Fort Lauderdale (FLL) Thur. April 16
Fort Lauderdale (FLL) – San Pedro Sula (SAP) – Fort Lauderdale (FLL) Sat. April 18
Medellin (MDE) – Fort Lauderdale (FLL) Tue. April 21
Bogota (BOG) – Fort Lauderdale (FLL) Wed. April 22
Cali (CLO) – Cartagena (CTG) – Fort Lauderdale (FLL) Thur. April 23

Guests make these trips on board one of Spirit’s signature bright yellow planes with every middle seat blocked off to improve social distancing. As these humanitarian flights continue, Spirit will be following health and safety guidelines from the Centers for Disease Control and Prevention (CDC) while remaining in close contact with authorities to ensure the safety of its Guests and Team Members.

Spirit’s repatriation efforts have been made possible by U.S. embassies in Colombia, Panama, Haiti, Aruba, the Dominican Republic, and Honduras. Guests needing to return home from an international destination should contact their country’s embassy in that location.

Spirit Airlines aircraft photo gallery:

Spirit Airlines to add international routes from New Orleans

Spirit Airlines has made this announcement:

Spirit Airlines is broadening The Crescent City’s international reach with two new destinations.

The nation’s fastest-growing airline will fly from Louis Armstrong New Orleans International Airport (MSY) to Cancun, Mexico (CUN) starting on June 10*. The next day, Spirit will inaugurate service to San Pedro Sula, Honduras (SAP)*.

The airline will also increase frequency to Orlando International Airport (MCO), with one additional daily flight, starting on April 22.

New Orleans is home to one of the largest Honduran populations in the United States. Spirit’s flights to San Pedro Sula’s Ramón Villeda Morales Airport will make it easier for people to visit their friends and family, along with making the city more accessible to tourists. Flights to San Pedro Sula will operate on Tuesday, Thursday and Sunday, with connecting options on other days of the week.

Spirit brought its low fares and bright-yellow planes to MSY in January 2013 with flights to Dallas/Fort Worth (DFW). Seven years later, the airline provides nonstop service from MSY to a total of 22 domestic and international destinations. Spirit’s investment in New Orleans turned it into the third-largest carrier in the city (measured by available seat miles). The airline served approximately 1.7 million Guests at MSY in 2019—a 20 percent increase year-over-year—with plans to keep growing in 2020.

New Orleans is the sixth city this year to gain flights to Cancun on Spirit Airlines. Flights are scheduled four times per week: Monday, Wednesday, Friday, and Saturday, with connecting options available on the other days of the week.

Routes & Frequencies
New Orleans (MSY) to/from: Effective: Frequency:
Orlando (MCO) April 22, 2020 2x Daily
Cancun (CUN) June 10, 2020 4x Weekly
San Pedro Sula (SAP) June 11, 2020 3x Weekly
Atlanta (ATL) Now 1x Daily
Austin (AUS) Now 1x Daily
Nashville (BNA) Now 1x Daily
Boston (BOS) Now 1x Daily
Baltimore (BWI) Now 1x Daily
Cleveland (CLE) Now 3x Weekly
Columbus (CMH) Now 3x Weekly
Dallas/Fort Worth (DFW) Now 1x Daily
Detroit (DTW) Now 1 – 2x Daily
Newark (EWR) Now 1x Daily
Fort Lauderdale (FLL) Now 2 – 3x Daily
Houston (IAH) Now 1x Daily
Las Vegas (LAS) Now 1x Daily
Los Angeles (LAX) Now 1x Daily
Minneapolis (MSP) Now 4x Weekly
Chicago O’Hare (ORD) Now 1 – 2x Daily
Philadelphia (PHL) Now 4x Weekly
Raleigh-Durham (RDU) Now 1x Daily
Tampa (TPA) Now 1x Daily

 

*Subject to government approval

Spirit Airlines aircraft photo gallery:

Spirit Airlines to move its Operational Control Center from Miramar, FL to the Nashville area

Delivered on February 2, 2019

Spirit Airlines has made this announcement:

America’s fastest-growing airline is expanding behind the scenes to support its growing operation and set the stage for future expansion. Spirit Airlines will bolster network resiliency and reduce hurricane and tropical storm risk by bringing more than 240 Team Members from its Operational Control Center (OCC) in Miramar, Fla., to a nearly 49,000-square-foot facility in Williamson County, Tennessee. The transition is scheduled to be completed by early 2021, and Spirit also plans to add nearly 100 more positions at the OCC over the next five years.

The OCC controls round-the-clock flight operations for more than 650 flights each day across the U.S., Latin America and the Caribbean. Team Members are responsible for flight dispatch, crew scheduling, maintenance control, aircraft routing, air traffic control coordination, Guest solutions and more. Spirit’s operations team is instrumental in the airline’s commitment to invest in the Guest experience and deliver the Best Value in the Sky. Spirit secured industry acclaim as the country’s most on-time Low Cost Airline by Flight Global, as well as international recognition as the Low Cost Airline of the Year at the CAPA World Aviation Summit and Air Transport World’sValue Airline of the Year. Spirit’s OCC team efforts have helped the airline achieve among the best on-time performance for the past two years.

The Music City came out on top in a nationwide search due to its geographic location, business climate and growing aviation sector. Spirit started Nashville service in October 2019 with new nonstop flights to Baltimore/Washington (BWI), Fort Lauderdale (FLL), Las Vegas (LAS), New Orleans (MSY), Orlando (MCO) and Tampa (TPA). Soon, Nashville gets even More Go with the upcoming launch of nonstop flights to Austin (AUS), Newark (EWR), Los Angeles (LAX) and Cancun (CUN).

More than 700 of Spirit’s Miramar-based Team Members will move into the airline’s new corporate headquarters (below) scheduled to open near the Fort Lauderdale-Hollywood International Airport in 2022. The airline also plans to add an additional 225 positions at the new HQ to support Spirit’s expanding domestic and international operations.

 

The OCC move coincides with Spirit’s plan to double its all-Airbus fleet to about 300 aircraft over the next five years. The airline recently finalized an order for the delivery of 100 new Airbus A320neo Family Aircraft through 2027.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N907NK (msn 8275) FLL (Andy Cripps). Image: 949114.

Spirit Airlines aircraft slide show:

 

Spirit Airlines becomes Fort Lauderdale’s largest international airline

Spirit Airlines has made this announcement:

Spirit Airlines is scheduling additional flights every day from some of Central and South Florida’s most popular destinations.

In all, Florida’s Hometown Airline plans to inaugurate or upgrade the frequency of flights on 16 routes from Fort Lauderdale-Hollywood International Airport (FLL) and Orlando International Airport (MCO). The changes will begin April 1, 2020 and continue rolling out through July.

New Service
Fort Lauderdale (FLL) to/from: Effective: Frequency:
Oakland (OAK) April 1, 2020 Daily
Extensions & Additional Frequencies
Fort Lauderdale (FLL) to/from: Effective: Frequency:
Guatemala City (GUA) April 22, 2020 Up to 2 Daily*
Myrtle Beach (MYR) April 22, 2020 2x Daily
New Orleans (MSY) April 22, 2020 2x Daily**
Philadelphia (PHL) April 22, 2020 4x Daily
San Salvador (SAL) April 23, 2020 Up to 2 Daily*
St. Croix (STX) June 10, 2020 Daily
Atlantic City (ACY) July 9, 2020 3x Daily
Detroit (DTW) July 9, 2020 3x Daily
Orlando (MCO) to/from: Effective: Frequency:
Medellín (MDE) April 22, 2020 3x Weekly
New York LaGuardia (LGA) April 22, 2020 1x Daily***
Raleigh-Durham (RDU) April 22, 2020 2x Daily
Atlantic City (ACY) July 9, 2020 Up to 3 Daily
Guatemala City (GUA) July 9, 2020 Daily*
Kansas City (MCI) July 9, 2020 Up to 2 Daily
Pittsburgh (PIT) July 9, 2020 2x Daily

Fort Lauderdale’s growth includes additional flights to Guatemala City (GUA), San Salvador (SAL) and St. Croix (STX), which will cement Spirit’s lead as the airport’s largest carrier to the Caribbean and Latin America. The airline surpassed JetBlue in terms of available seats to the region in January 2020, with nonstop service to 28 destinations.

*Requires government approval
**3x daily spring seasonal
***Upgraded from seasonal

Spirit Airlines aircraft photo gallery:

Routes from FLL:

Spirit Airlines reports fourth quarter and full year 2019 results

Spirit Airlines, Inc. has reported fourth quarter and full year 2019 financial results.

Fourth Quarter 2019 Fourth Quarter 2018
As Reported Adjusted As Reported Adjusted
(GAAP) (non-GAAP)1 (GAAP) (non-GAAP)1
Revenue $969.8 million $969.8 million $862.8 million $862.8 million
Operating Income $124.6 million $129.6 million $136.1 million $139.3 million
Operating Margin 12.9% 13.4% 15.8% 16.2%
Net Income $81.2 million $85.0 million $91.9 million $94.7 million
Diluted EPS $1.18 $1.24 $1.34 $1.38

“2019 was a year of many accomplishments for Spirit.  Our improving operational reliability, and the investments we’re making to provide our Guests the best value in the sky are being noticed by our Guests and earning us international acclaim.  We once again achieved a fourth-place ranking for on-time performance among reporting U.S. carriers2.  Spirit also recently received several global recognitions:  Low-Cost Airline of the Year at the CAPA World Aviation Summit; Value Airline of the Year by Air Transport World; and, most on-time Low Cost Airline by Flight Global.  Our team also delivered strong financial results for 2019.  For the full year 2019, our GAAP pre-tax earnings increased 112.9 percent year over year.  Excluding special items, our Adjusted pre-tax earnings increased 15.3 percent year over year1,” said Ted Christie, Spirit’s President and Chief Executive Officer.  “I am very proud of the Spirit team for these accomplishments.  Looking ahead to 2020, we are focused on running a safe and reliable airline, leveraging technology and automation to drive further efficiencies, and executing on our revenue initiatives to deliver strong returns for our shareholders.”

 

Revenue Performance
For the fourth quarter 2019, Spirit’s total operating revenue was $969.8 million, an increase of 12.4 percent compared to the fourth quarter 2018, driven by an 18.6 percent increase in flight volume.  Fourth quarter 2019 revenue includes approximately $7.2 million of out-of-period revenue related to the reclamation of over-remitted Federal Excise Tax.

Total operating revenue per available seat mile (“TRASM”) for the fourth quarter 2019 decreased 3.6 percent compared to the same period last year.  Without the out-of-period revenue, the Company estimates its fourth quarter 2019 TRASM would have been down about 4.3 percent year-over-year.  The decrease in TRASM was driven by lower operating yields, as load factor for the period was up slightly.

On a per passenger flight segment (“PFS”) basis, for the fourth quarter 2019 total revenue per PFS decreased 5.5 percent year over year, to $110.71, non-ticket revenue per PFS increased 2.3 percent to $58.033, and fare revenue per PFS decreased 12.9 percent to $52.68.

Cost Performance
For the fourth quarter 2019, total GAAP operating expenses increased 16.3 percent year over year to $845.2 million.  Adjusted operating expenses for the fourth quarter 2019 increased 16.1 percent year over year to $840.2 million4. Primary drivers of the increase in adjusted operating expense compared to the fourth quarter last year include increased flight volume and higher ground handling rates.

Aircraft fuel expense increased in the fourth quarter 2019 by 6.7 percent year over year, due to a 14.8 percent increase in fuel gallons consumed, partially offset by a 7.1 percent decrease in fuel rates.

Spirit reported fourth quarter 2019 cost per available seat mile (“ASM”), excluding operating special items and fuel (“Adjusted CASM ex-fuel”), of 5.67 cents4, up 3.3 percent compared to the same period last year.  Primary drivers of the increase on a per ASM basis compared to the same period last year included heavy maintenance amortization, maintenance, material and repairs and other operating expenses.

“Our team did a great job recovering from the operational issues we faced in the summer and finished the year 2019 with strong operational results.  Strong operational performance is key to our continued good cost management and we believe we are well-positioned as we enter 2020.  As we’ve noted previously, we have several inflationary pressures we are facing such that we expect our 2020 CASM ex-fuel to increase 1 to 2 percent year over year.  From a timing perspective, we face the toughest hurdle in the first quarter, but we anticipate the headwinds will ease as we progress through the year.  And, while we already have one of the most fuel-efficient fleets in the U.S., with our growing fleet of A320neo aircraft we should see even greater fuel efficiency this year, helping us offset some Adjusted CASM ex-fuel pressure,” said Scott Haralson, Spirit’s Chief Financial Officer.

Liquidity
Spirit ended the year with unrestricted cash, cash equivalents, and short-term investments of $1.1 billion.  For the twelve months ended December 31, 2019, Spirit generated $409.2 million of operating cash flow.  After investing $294.5 million for aircraft purchases and pre-delivery deposits, and receiving $225.9 million of proceeds from issuance of long-term debt, Adjusted free cash flow for the twelve months ended December 31, 2019 was $340.6 million5.  For the twelve months ended December 31, 2019, net cash used in financing activities was $120.2 million.

Fleet
Spirit took delivery of nine new aircraft (seven A320neo and two A320ceo) during the fourth quarter 2019, ending the year with 145 aircraft in its fleet.

Full Year 2019 Highlights

  • Launched service to the following new destinations: Austin, Burbank, Charlotte-Douglas, Indianapolis, Nashville, Raleigh-Durham and Sacramento.
  • Received global recognition as the Low-Cost Airline of the Year at the CAPA (Centre for Aviation) World Aviation Summit. CAPA, part of the Aviation Week Network, is one of the world’s most trusted sources of market intelligence for the aviation and travel industry.
  • Continued its commitment to invest in the Guest experience with an industry-leading technology to connect with its Guests via the messaging application WhatsApp.
  • Unveiled new, ergonomic and more comfortable seats that provide additional usable legroom as well as added comfort to its Big Front Seats, making the best value in the sky even better.
  • Announced a new $250 million global headquarters investment at a new campus in Dania Beach, Florida.
  • Announced an order for 100 Airbus A320neo Family Aircraft, with an option to purchase up to 50 more, to support the airline’s growth and sustain one of the youngest, most fuel-efficient fleets in the U.S.  These aircraft are planned for delivery through 2027.

Spirit Airlines aircraft photo gallery:

Route Map:

Spirit Airlines to launch Oakland – Fort Lauderdale/Hollywood flights

Spirit Airlines is adding Oakland (OAK) nonstop service to and from Fort Lauderdale/Hollywood (FLL) on April 1, making Spirit the only airline flying OAK to FLL nonstop.

Spirit started Oakland service in 2011 with a single flight to Las Vegas (LAS) and grew to third place among Oakland’s largest carriers. The new Fort Lauderdale flight joins existing service to Chicago (ORD), Detroit (DTW), Houston (IAH) and Los Angeles (LAX), along with what’s become four daily flights to Las Vegas.

Oakland (OAK) to/from: Effective: Frequency:
Fort Lauderdale (FLL) April 1, 2020 Daily, seasonal
Chicago (ORD) Now Daily, seasonal
Detroit (DTW) Now Daily, seasonal
Houston (IAH) Now Daily, seasonal
Las Vegas (LAS) Now 4x daily
Los Angeles (LAX) Now 2x daily

Spirit Airlines aircraft photo gallery:

Spirit Airlines adds two new routes to Colombia

Spirit Airlines has announced it will add two new destinations to its network in 2020, with service to Bucaramanga (BGA) and Barranquilla (BAQ) starting in April, 2020, subject to government approval.

Spirit flew its first flight to Colombia in May 2008, connecting Fort Lauderdale/Hollywood (FLL) to Cartagena (CTG). The airline’s expansion continued over the next decade with flights to Bogota (BOG), Medellin (MDE), Armenia (AXM) and Cali (CLO). Separately, the airline established nonstop flights between Orlando (MCO) and Cartagena, Bogota and Medellin. The addition of Bucaramanga and Barranquilla to Fort Lauderdale’s lineup means Spirit serves more cities in Colombia nonstop from the U.S. than any other airline, with a total of 10 routes from two U.S. gateways to seven Colombian cities.

Fort Lauderdale (FLL) to/from: Starts: Frequency:
Bucaramanga (BGA) April 22, 2020 Mon, Wed, Fri
Barranquilla (BAQ) April 23, 2020 Tue, Thu, Sun
Cartagena (CTG) Existing Service Mon, Wed, Fri, Sat
Bogota (BOG) Existing Service Daily
Medellin (MDE) Existing Service Daily
Armenia (AXM) Existing Service Mon, Wed, Fri
Cali (CLO) Existing Service Daily
Orlando (MCO) to/from:
Cartagena (CTG) Existing Service Tue, Sat
Bogota (BOG) Existing Service Daily
Medellin (MDE) Existing Service Mon, Fri

Routes south out of FLL:

Spirit Airlines aircraft photo gallery:

Spirit Airlines finalizes order for 100 Airbus A320neo Family aircraft

Spirit Airlines has finalized a purchase agreement with Airbus for 100 A320neo Family aircraft.

In October, the two parties had signed and announced a memorandum of understanding (MoU) for the purchase of up to 100 of the aircraft – a mix of A319neo, A320neo, and A321neo – to meet the airline’s future fleet requirements.

Spirit is based in South Florida and is the fastest-growing airline in the United States, with flights throughout the U.S., Latin America and the Caribbean. The airline will announce an engine selection at a later date.

Firm orders worldwide for the A320neo Family now have surpassed 7,300 from more than 110 global customers.

Photo: Airbus.

Spirit unveils its redesigned cabin with new seats

Spirit Airlines has made this announcement:

America’s brightest airline livery is bringing its signature yellow glow inside the cabin as Spirit Airlines unveils a freshly updated interior. Complete with roomier seats, a larger tray table, and additional pre-recline on every row, this latest initiative is part of Spirit’s promise to Invest in the Guest by reviewing and improving every facet of the Guest experience. The first seats were installed at Spirit’s Detroit hangar on a brand-new Airbus A320neo delivered earlier this month. The updated cabin and recently refreshed outdoor paint scheme put the spotlight on Spirit’s all-Airbus Fit Fleet, one of the youngest, most fuel-efficient in the country.

The refreshed interior design features updated carpet, new signage and a Spirit-branded color palette throughout the cabin for an improved aesthetic and modern look and feel. The new ergonomically-designed seats – manufactured by Acro Aircraft Seating and previously announced in September 2019 – are padded with ultra-light weight foam and made of a composite skeleton to add comfort without increasing weight. Seat enhancements allow for a wider range of healthy postures and movements, offering an additional two inches of usable legroom compared to industry-standard flatback seats with the same pitch.

In addition, Spirit is adding comfort to its Big Front Seats™, making the best value in the sky even better. Spirit’s updated Big Front Seat™ will feature a new ergonomically-improved headrest with plush memory foam, additional memory foam in the seat cushion for comfort and thigh support, and sleek Spirit-branded aesthetic with yellow and black stitching. Guest feedback and survey results helped guide these design enhancements with manufacturer HAECO Cabin Solutions.

Additional highlights of the cabin redesign:

  • No more back pouches and safety cards in the way. Our literature pockets are now elevated, saving valuable real estate for Guests’ knees.
  • The new seats have full-sized tray tables.
  • New galley carts weigh 4 pounds less than existing carts, and each new seat is 2.6 pounds lighter, savings hundreds of pounds per flight and maintaining high fuel efficiency on Spirit’s Fit Fleet™.
  • Middle seats will gain another inch of width, and every seat will gain nearly an inch of pre-recline compared to Spirit’s current seating configuration, with exit rows adding even more.

The redesigned interior will be installed on nearly 150 new Airbus A320 Family aircraft being delivered to Spirit over the next several years. Additionally, Spirit will update the interiors of aircraft cycling through scheduled maintenance. Other projects in the pipeline as part of the Invest in the Guest initiative include inflight Wi-Fi, a revamped Loyalty program, and self-bag drop operations to reduce check-in lines.

Spirit Airlines aircraft photo gallery: