MAH4546
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Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 10:37 pm

Spirit Airlines will speed up the retirement of its MD80 fleet, and will now be going all-Airbus in the beginning of 2007, also speeding up deliveries. The MD80s are putting a strain on Spirit's financial performance, as they are expensive to maintain and not fuel efficient. As a result, Spirit will be short on planes as MD80s are going to be retired quicker than the new Airbus arrive, though they will speed Airbus deliveries with $100M in new equity. While the airline is financially stable, they are currently in the red due to fuel costs and their MD80 fleet.

One consequence is that their new Fort Lauderdale-Mexico City route is delayed, once more, and will now start in June 2006. It has also delayed the start of planned trans-cons from FLL (LAX and LAS) because those take up the aircraft for too much time.

Much of their future growth will again be international expansion. Most of this will be from Fort Lauderdale, though, as recent new routes have shown (LGA-NAS, MCO-NAS, and TPA-CUN), it is not limited to FLL. I have been told to expect one more new destination (international) to start from FLL by year's end. If I were to take a wild stab at it, I would say Aruba.

Miami Herald article:
http://www.miami.com/mld/miamiherald/12164387.htm
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DAYflyer
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:14 pm

Interesting that Spirit is going international to this degree. I have never flown on them, but I understand they are privately owned. How is the service?

Makes sense to retire the MD-80 fleet if the Airbuses have that much better operating economics.
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PVD757
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:36 pm

What doesn't make sense to me is that they were already planning on being "all-Airbus" by the beginning of 2007...Not sure what the 100 million is speeding up!
 
PVD757
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:44 pm

"Spirit will lease the aircraft from ILFC, International Lease Finance Corporation. With today’s announcement, Spirit’s fleet consists of four Airbus A321s, 23 MD-80s, and four Airbus A319s. Spirit will deliver six more A319s and two more A321s by the end of the year and has another 23 aircraft on order with options for 50 more. Spirit is committed to becoming an all Airbus fleet by early-2007."

This is pararaph I pasted from a June 3rd press release off the NK website. It clerly states the early 2007 replacement of the MD's. I'm hoping it means they will just have more airbuses in early 2007 than what they originally was planned.

MAH: I've heard AUA too. I was also told that any Central American capitol city is fair game too. GCM could be a weekend destination as well.
 
MAH4546
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:46 pm

Quoting PVD757 (Reply 2):
What doesn't make sense to me is that they were already planning on being "all-Airbus" by the beginning of 2007...Not sure what the 100 million is speeding up!

No, the original plan was all-Airbus by late 2008.
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PVD757
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:49 pm

Quoting MAH4546 (Reply 4):
No, the original plan was all-Airbus by late 2008.

Yes, maybe, but that's not what NK was advertising only a month ago. (See reply 3...).
 
quickmover
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:50 pm

I thought I read somewhere that they are adding the 321s at a rate of replacing 2 md80s with 1 321.
 
N62NA
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:53 pm

In the article, an "expert" was quoted as saying,

Ray Neidl, airline analyst with Calyon Securities, said Spirit needs the cash infusion.

''Because of their older fleet and sky-high fuel prices, they probably have been disproportionately affected more than any other airline,'' he said.


I don't know if I agree with that statement. Look at the huge AA M80 fleet, the huge DL M80 fleet, not to mention the NW DC9 fleet.
 
MAH4546
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RE: Spirit Airlines To Speed Up MD80 Retirements

Tue Jul 19, 2005 11:54 pm

Quoting Quickmover (Reply 6):
I thought I read somewhere that they are adding the 321s at a rate of replacing 2 md80s with 1 321.

Yes. I don't know the exact rates, but new planes are coming slower than they are leaving. This has had them reduce some service. DTW-PVD/ACY have been cut, as have ORD-LAX/LAS/TPA, while frequencies on FLL-PVD/ACY have been shaved too.

Quoting PVD757 (Reply 5):
Yes, maybe, but that's not what NK was advertising only a month ago. (See reply 3...).

True, guess the Herald and Sun Sentinel just caught on to it with the news of a new $100M in equity.
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SHUPirate1
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 12:16 am

MAH-Any idea where Spirit's MD-80's are going? Could American be acquiring yet another handful?
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D950
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 12:33 am

Quoting SHUPirate1 (Reply 9):
Any idea where Spirit's MD-80's are going? Could American be acquiring yet another handful?

At least one went to SwiftAir CC-JSS. They had a few relatively low hour MD83's that should end up somwhere other than the desert, (Allegiant??)
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SHUPirate1
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 12:35 am

D950-I'm sorry, I wasn't clear...that second comment was supposed to be tongue-in-cheek...
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MAH4546
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 12:38 am

Quoting SHUPirate1 (Reply 9):
MAH-Any idea where Spirit's MD-80's are going? Could American be acquiring yet another handful?

Considering AA has their own MD80s in storage, I don't think they need ones that are in pretty bad shape (not the mechanicals, but the interiors).
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kappel
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 12:52 am

Quoting N62NA (Reply 7):
I don't know if I agree with that statement. Look at the huge AA M80 fleet, the huge DL M80 fleet, not to mention the NW DC9 fleet.

Yeah, but those airlines are also deeply in the red. So that's not really a good example. They may or may not be in the red because of their dc9/md80 fleet, but still..
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 1:04 am

Quoting MAH4546 (Thread starter):
The MD80s are putting a strain on Spirit's financial performance, as they are expensive to maintain and not fuel efficient.

Interesting. I have a pdf showing summer 2000 costs for these airframes per flight hour:

http://www.icao.int/icao/en/ro/Allpirg/allpirg4/wp28app.pdf

A319: $1,458/hour ("other") + $698/hour (fuel)= $2,156/hour (at $30/bbl oil)
MD80: $1,726/hour ("other") +$559/hour (fuel)= $2,285/hour (at $30/bbl oil)

Ok, the MD80 fuel burn seems low... The article states 799 gal/hour for the MD-80 and 821 gal/hour for the A319 for the fuel consumption... So for some reason it has the A319 paying more per gallon! Putting in the same cost per gallon, I get the MD80 at FY2000 mx costs is about 110% of the cost of an A319. ($2,805 for the MD80 vs. $2,566 for the A319 assuming fuel is $1.35/gallon). Can anyone confirm/deny the fuel burn rates? Otherwise, I would conclude its mx killing the MD80, not fuel burn.

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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 2:17 am

Quoting MAH4546 (Thread starter):
The MD80s are putting a strain on Spirit's financial performance, as they are expensive to maintain and not fuel efficient.

Then why is this not the case for AA who continue to operate the M80 as their primary US trunk aircraft? Given that AA yields are likely higher than Spirit's, I would have assumed that Spirit would retain its M80's for a longer period than AA.

I find it hard to believe that a high-capital/lease-cost 321/319 fleet has superior financial performance than an M80 fleet for a low-yield carrier.
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MAH4546
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 2:24 am

I don't know the details, just repeating what has been said.

Remember that many of AA's MD80s are pretty new. Some are only seven years old. They have the last MD80 ever built in their fleet. NK's MD80s are aging, acquired second hand, and performance nightmares.
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lowecur
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 3:00 am

I have been speaking with a Spirit pilot and he insists the company has had numerous conversations with Embraer in the last 90 days. This is of course speculation, but he has been a reliable source of information in the past.

If you think about it, Spirit, the new US Airways, and Jetblue all have designs on the Carribean, Latin America, Mexico, and the Bahamas. Jetblue plans to use their 190 extensively in these markets from either FLL or MIA, and US Airways will eventually expand their base in FLL as the new company emerges.
 
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 3:14 am

Quoting Lightsaber (Reply 14):
Ok, the MD80 fuel burn seems low... The article states 799 gal/hour for the MD-80 and 821 gal/hour for the A319

I disagree with this figure... I can tell you from having both the A319 and the M80 do the ACY-TPA run, that the A319 is always dispatched with much less fuel. M80 is usually around 25.0, where the A319 is around 21.0
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KarlB737
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 3:49 am

More on this topic:

Courtesy: The Detroit Free Press

http://www.freep.com/money/business/spirit19e_20050719.htm
 
MAH4546
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 4:37 am

Quoting KarlB737 (Reply 19):
More on this topic:

Courtesy: The Detroit Free Press

http://www.freep.com/money/business/...9.htm

Very poorly titled. They make it seem like Spirit wouldn't exist without this injection of cash, which is not true. They are losing money thanks to high fuel and maintence costs, but they are financially stable.
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PVD757
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 4:48 am

Quoting MAH4546 (Reply 20):
Very poorly titled. They make it seem like Spirit wouldn't exist without this injection of cash, which is not true. They are losing money thanks to high fuel and maintence costs, but they are financially stable.

I agree. The fleet replacement was a good finacial decision either way. Speeding up the process became more of a priority with the higher energy costs. Having the level of short term fuel hedges in place that they have is also a very smart move. At a minimum, it caps that line item in the expense column...
 
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RE: Spirit Airlines To Speed Up MD80 Retirements

Wed Jul 20, 2005 7:08 pm

I think this means more MD-82's for South African LCC Kulula. Kulula already have 2 former NK MD-82's (ZS-OPU , ZS-OBG)

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lightsaber
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RE: Spirit Airlines To Speed Up MD80 Retirements

Thu Jul 21, 2005 12:31 am

Quoting Nkops (Reply 18):
I disagree with this figure... I can tell you from having both the A319 and the M80 do the ACY-TPA run, that the A319 is always dispatched with much less fuel. M80 is usually around 25.0, where the A319 is around 21.0

Thanks. There is a reason I asked on the fuel, the numbers seemed too favorable to the MD80. What units are the ACY-TPY runs in?

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RE: Spirit Airlines To Speed Up MD80 Retirements

Thu Jul 21, 2005 12:36 am

Quoting Lightsaber (Reply 14):
A319: $1,458/hour ("other") + $698/hour (fuel)= $2,156/hour (at $30/bbl oil)
MD80: $1,726/hour ("other") +$559/hour (fuel)= $2,285/hour (at $30/bbl oil)

Ok, the MD80 fuel burn seems low... The article states 799 gal/hour for the MD-80 and 821 gal/hour for the A319 for the fuel consumption... So for some reason it has the A319 paying more per gallon! Putting in the same cost per gallon, I get the MD80 at FY2000 mx costs is about 110% of the cost of an A319. ($2,805 for the MD80 vs. $2,566 for the A319 assuming fuel is $1.35/gallon). Can anyone confirm/deny the fuel burn rates? Otherwise, I would conclude its mx killing the MD80, not fuel burn.

Well, the MD-80 is the larger aircraft, so it is likely to be sent out with more fuel. Any comparison of the MD-80 to the A320?
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lightsaber
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RE: Spirit Airlines To Speed Up MD80 Retirements

Thu Jul 21, 2005 12:57 am

Quoting N1120A (Reply 24):
Any comparison of the MD-80 to the A320?

Same link as post 14:
A320: $1520/hour ("other") + $753/hour (fuel) or 886 gal/hour
=$2,273 when oil was $30/bbl

Note: I expect the MD80 maintenance numbers to be getting worse, not better with time (corrosion, fatigue, etc.). Even with the JT8D traditionally being the cheapest mainline engine to service, its an old design that is going to be having quite a few of its more expensive parts reaching "end of life."

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nkops
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RE: Spirit Airlines To Speed Up MD80 Retirements

Thu Jul 21, 2005 4:10 am

Quoting Lightsaber (Reply 23):
What units are the ACY-TPY runs in?

Don't quite understand the question...
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