Spirit Airlines Q3 results

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By admin October 28, 2015 21:21

Spirit Airlines Q3 results

Spirit Airlines’ adjusted net income for the third quarter 2015 increased 31.6 percent to $97.3 million ($1.35 per diluted share) compared to the third quarter 2014. GAAP net income for the third quarter 2015 increased 44.9 percent year over year to $97.1 million ($1.35 per diluted share).

For the third quarter 2015, Spirit’s total operating revenue was $574.8 million, an increase of 10.6 percent compared to the third quarter 2014, driven by an increase in flight volume, partially offset by a decrease in operating yields.

Total revenue per passenger flight segment (“PFS”) for the third quarter 2015 decreased 13.1 percent year over year to $120.35, primarily driven by a 20.8 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pressures as well as a higher percentage of Spirit’s markets being under development compared to the same period last year. Non-ticket revenue remained stable, declining only 1.2 percent year over year on a per flight segment basis to $53.39. The decrease in non-ticket revenue was primarily attributable to the outsourcing of the Spirit’s onboard catering to a third-party provider under a revenue share agreement as well as slightly lower bag revenue per flight segment. These declines were partially offset by higher per segment convenience charges compared to the same period last year.

“I thank our team members for their contributions to our record third quarter results, driven by both lower ex-fuel unit costs and lower fuel prices,” said Ben Baldanza, Spirit’s Chief Executive Officer. “We remain focused on building long-term shareholder value by leveraging our ultra-low cost competitive advantage to continue to grow successfully, even in the midst of a volatile pricing environment.”

Adjusted operating expenses for the third quarter 2015 increased 2.0 percent to $417.3 million. GAAP total operating expenses decreased 0.5 percent year over year to $417.6 million. Operating expenses benefited from fuel expense decreasing 32.5 percent, or $55.7 million, on a fuel volume increase of 30.9 percent.

Spirit reported third quarter 2015 cost per available seat mile (“ASM”) excluding special items and fuel (“Adjusted CASM ex-fuel”) of 5.39 cents, a decrease of 9.0 percent compared to the same period last year, driven primarily by lower aircraft rent per ASM and lower labor expense per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft. Labor expense per ASM in the third quarter 2015 was lower compared to the same period last year primarily due to scale benefits from overall growth and from larger gauge aircraft.

“Our team did a great job managing costs during the quarter and we remain on target to deliver a full year 2015 Adjusted CASM ex-fuel decrease of approximately 6 percent year over year,” said Ted Christie, Spirit’s Chief Financial Officer. “We have several CASM pressures facing us in 2016, including headwinds from accelerated depreciation of heavy maintenance events and additional supplemental rent related to leased aircraft scheduled to return to lessors beginning next year; however, given our team’s diligence in controlling costs, I remain confident that the trajectory of our Adjusted CASM ex-fuel will continue to be stable to declining throughout our growth cycle.”

admin
By admin October 28, 2015 21:21