LAXintl
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Spirit Airlines Post Q1 Profit - $30.6mil Net

Tue Apr 30, 2013 10:39 am

Another quarter of strong performance from our favorite ULCC.

GAAP net income was $30.6 million in Q1 - up 36.4% from 2012.

Operating margin, excluding special items, of 14.4 %.

ASMs up 20.8 percent with load factor of 85.1%

Return on invested capital for the last twelve months ended March 31, 2013 was whopping 28.0%.


More after the earnings call.

Press release:
http://finance.yahoo.com/news/spirit...unces-first-quarter-103000281.html

=
From the desert to the sea, to all of Southern California
 
MaverickM11
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Tue Apr 30, 2013 2:13 pm

NK continues to kill it. Must be the IFE 
E pur si muove -Galileo
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Tue Apr 30, 2013 11:50 pm

Earnings call notes


FINANCIAL

o Another spectacular quarter - earnings $30.6mil - up 36.4%
o Operating margin 14.4%
o Revenues up 22.9% to $370.4 on 20.8% ASM growth
o Total revenue per pax up 4.3% - average base fare now $79.09 - Ancillary $54.75/pax
o ex-fuel CASM up 0.8% to 6.04 - expect flat to -1% remainder of year.
o 21% of Q2 fuel hedged.
o EBITDAR margin target for the full year 2013 of between 25% to 27%.
o ZERO debt on balance sheet
o $483.5 million in unrestricted cash


TRAFFIC / NETWORK

o Very pleased with high new route successes
o Lots of weather related issues early in quarter, but good operational reliability at end
o Expect 2013 capacity up about 21%
o Creating a more concentrated spider web route network - help drive scale benefits, and cost efficiencies
o Demand strong, but saw some pricing weakness for May.
o Get strong stimulation by dropping fares 30%-50%
o Not worried about B6 at FLL. Different companies, with different views and priorities. Its all good for consumer choice
o Can see adding 20+ new routes per year. Still have that long list of identified market opportunities.

FLEET

o Took 2 used A319s on lease, and 2 new A320 during Qtr.
o 5 More A320s rest of 2013.
o Will try to build virtual spares in schedule for Chicago, Las Vegas and Dallas.
o A320s 14% more cost efficient versus A319 on seat basis

OTHER

o Low-cost, low-fare, high-choice strategy continues to be successful
o Consolidation opens ever more opportunity as carriers exit markets, trim capacity or raise fares.
o Governments continued interest in raising passenger taxes will depress consumer activity. Its regressive to keep thinking they can add $5 here, $10 there on tickets before it depresses other economic activity.

=
From the desert to the sea, to all of Southern California
 
hiflyeras
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 12:48 am

All other US airlines had better watch their backs....seems that whatever NK does turns to gold. Continued expansion out of IAH and DFW ought to have both AA and UA worried.
 
F9Animal
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 1:15 am

Wow! They may not be the favorite airline on this site.... But profit is profit, and it seems they dont have a problem getting people to fly on them!
I Am A Different Animal!!
 
MaverickM11
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 1:28 am

Quoting LAXintl (Reply 2):
o Not worried about B6 at FLL. Different companies, with different views and priorities. Its all good for consumer choice

Different companies, different models--the FLL hub was Spirit 2.0; we're at least on 3.0 now and I'm not sure the FLL hub is long for this world. I don't think the current model has any interest in connections so anything that isn't mostly local is gonzo.
E pur si muove -Galileo
 
flyby519
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 1:51 am

These guys are the next WN. Watch out everyone
These postings or comments are not a company-sponsored source of communication.
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 2:44 am

As much as some like to point out the negatives about Spirit, the strong financial numbers speak for themselves.

Every year millions chose to fly Spirit, and according the airline based on its $9 Club membership counts and branded credit card users, these are not all one off travelers, but a growing cadre of loyal repeat customers.

Immensely impressive operation imo.
From the desert to the sea, to all of Southern California
 
UALWN
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 10:29 am

Quoting flyby519 (Reply 6):
These guys are the next WN. Watch out everyone

More like the next FR.
AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/787/AB6/310/32X/330/340/380
 
mercure1
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 4:43 pm

Very smart company.

Who said the ULCC model that works well in places like Europe and Asia would not work in America.

Huge growth potential in Americas skies for such concept.
 
MaverickM11
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 4:56 pm

Quoting mercure1 (Reply 9):
Who said the ULCC model that works well in places like Europe and Asia would not work in America.

There's always someone, and they're always wrong. I've also heard "Asians would never pay for food--they *appreciate* and *pay for* service".  
E pur si muove -Galileo
 
kaitak
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 5:00 pm

Great to see an airline doing well, particularly in a tough economic environment!

Quoting UALWN (Reply 8):
Quoting flyby519 (Reply 6):These guys are the next WN. Watch out everyone

More like the next FR.

I think UALWN is closer to the mark!

Is Spirit still charging for hand baggage and the use of overhead lockers, or was this just an FR-style publicity stunt?

Finally, what about pax and LF details?
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Wed May 01, 2013 5:54 pm

Quoting kaitak (Reply 11):
Is Spirit still charging for hand baggage and the use of overhead lockers, or was this just an FR-style publicity stunt?

Yes Spirit charges for carryons. Seems to be working as we will soon be approaching the 1-year anniversary.

Quoting kaitak (Reply 11):
Finally, what about pax and LF details?

See...

Quoting LAXintl (Thread starter):
ASMs up 20.8 percent with load factor of 85.1%
From the desert to the sea, to all of Southern California
 
OB1504
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 4:40 am

Quoting LAXintl (Reply 12):
Yes Spirit charges for carryons. Seems to be working as we will soon be approaching the 1-year anniversary.

Spirit has been charging for carry-on/hand baggage for much longer than a year...
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 5:10 am

Right - approaching the 3-year anniversary.
From the desert to the sea, to all of Southern California
 
mercure1
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 3:05 pm

Quoting MaverickM11 (Reply 10):
There's always someone, and they're always wrong. I've also heard "Asians would never pay for food--they *appreciate* and *pay for* service".

Ha ha.

One basic feature of humankind is desire to save money, and for most, air travel is simply a given evil to get between A and B, whether this is in Europe, America or Asia.

Its for this reason folks like Ryanair, Air Asia, and Spirit are excelling. I think the market is almost limitless for these companies especially as growing numbers of people fly in the world and do so ever more frequently.

Spirit clearly saw this and capitalized on this while all the other US majors were busy fighting each for the slice of the supposed "premium" traffic while taking trips to bankruptcy to survive.
 
MaverickM11
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 3:11 pm

Quoting OB1504 (Reply 13):

Spirit has been charging for carry-on/hand baggage for much longer than a year...
Quoting LAXintl (Reply 14):
Right - approaching the 3-year anniversary.

I wonder if/when this will become the norm at legacy carriers too. I could see some sort of carryon charge where elites/high fares are exempted--even something like F9 just announced: if you buy a cheap ticket anywhere but the airline's website, you pay for carryons.
E pur si muove -Galileo
 
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scbriml
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 3:14 pm

Well played Spirit.

However, I have to say I prefer the old colour scheme to the new one.

View Large View Medium
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Photo © Steve Brimley
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Click here for bigger photo!

Photo © Steve Brimley

Time flies like an arrow. Fruit flies like a banana!
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 4:17 pm

Quoting mercure1 (Reply 15):
Its for this reason folks like Ryanair, Air Asia, and Spirit are excelling. I think the market is almost limitless for these companies especially as growing numbers of people fly in the world and do so ever more frequently.

   Folks like Spirit do have the demographics on their side.

I don't have the exact numbers with me, but there is a huge percentage of folks that still have not flown even in the US, and another huge percentage of folks that only do so very occasionally. Add in the growing affluence globally where air travel is becoming more of a norm for people there are literally growing count of hundreds of millions of potential clients that folks Spirit and other ULCCs have at their doorsteps to entice with rock bottom prices.

Quoting mercure1 (Reply 15):
Spirit clearly saw this and capitalized on this while all the other US majors were busy fighting each for the slice of the supposed "premium" traffic while taking trips to bankruptcy to survive.

Yes its interesting the bulk of the industry beat each other up to chase after the top 10% slice of the market, while 90% of flyers really only want a cheap seat.

Of course I think the major airlines have boxed themselves in with a cost base that could never survive carrying only the discount client and hence so desperately to woo every premium flyer they can capture.

Quoting MaverickM11 (Reply 16):
I wonder if/when this will become the norm at legacy carriers too. I could see some sort of carryon charge where elites/high fares are exempted--even something like F9 just announced: if you buy a cheap ticket anywhere but the airline's website, you pay for carryons.

I dont see why not, but it will take a brave major to be the first one. If not for the AA merger, I would have said US could have been that canary.
From the desert to the sea, to all of Southern California
 
silentbob
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 4:21 pm

Quoting HiFlyerAS (Reply 3):
All other US airlines had better watch their backs....seems that whatever NK does turns to gold. Continued expansion out of IAH and DFW ought to have both AA and UA worried.
Quoting flyby519 (Reply 6):
These guys are the next WN. Watch out everyone
Quoting UALWN (Reply 8):
More like the next FR.

I've been saying for a year or so now that NK is going to do the same things to WN that WN did to the rest of the industry. They are poised for massive growth over the next few years.
 
MaverickM11
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 4:33 pm

Quoting LAXintl (Reply 18):
I dont see why not, but it will take a brave major to be the first one. If not for the AA merger, I would have said US could have been that canary.

It'd be tough to be the first mover, but recently I flew AA on a paid F ticket, and by the time I got to my seat a little late there was zero room for a standard rollaboard, which I think would anger your best customers more than a fee for your worst customers, so to speak.

Quoting silentbob (Reply 19):
I've been saying for a year or so now that NK is going to do the same things to WN that WN did to the rest of the industry. They are poised for massive growth over the next few years.

I agree, but I also question whether any of the majors can afford to take the passengers that NK/G4 do. I don't know that NK is bringing about the same creative destruction WN was, back when deregulation was new and legacy carriers' costs were bloated by decades of regulation.
E pur si muove -Galileo
 
LAXintl
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 7:01 pm

Quoting MaverickM11 (Reply 20):
I agree, but I also question whether any of the majors can afford to take the passengers that NK/G4 do.

I think this is a huge advantage NK has.

Really no one can enter into a dollar for dollar pricing war against NK without losing even more money. NK basically has an ex-fuel CASM advantage of 50% over the majors, and can still transport people at a profit while others would bleed terribly.

Though NK has been smart. While they have entered high visibility markets such as DFW, but have done so with relative low frequency which has allowed the majors to ignore them. However I wonder how long this will last as sooner or later NK will start to steal pax and effect the bottom lines as they grow in scope and start becoming a noticeable pricing effect in markets.
From the desert to the sea, to all of Southern California
 
santi319
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 8:45 pm

Quoting LAXintl (Reply 21):
However I wonder how long this will last as sooner or later NK will start to steal pax and effect the bottom lines as they grow in scope and start becoming a noticeable pricing effect in markets.

I think with all the mergers, NK will be the ULCC of choice, the future of the US aviation, will be similar to Europe where short to medium haul markets will be run by LCC and ULCC, and Long hauls plus premium markets will be run by Legacies, with the ocassional LCC, in my opinion.
 
Noise
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 9:03 pm

It says a lot when the country's worst airline in terms of quality of service is actually one of its most successful.
 
PlanesNTrains
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RE: Spirit Airlines Post Q1 Profit - $30.6mil Net

Thu May 02, 2013 9:53 pm

Quoting Noise (Reply 23):
It says a lot when the country's worst airline in terms of quality of service is actually one of its most successful.

It says a lot about marketing, cost-control, knowing your targeted consumer, and focusing on one thing and doing it really well. The challenge for the legacies in comparison is that they haven't always controlled their costs, they target virtually all consumers, and they focus on a variety of different market-segments. They have decades-tenured employees, they have multiple models of aircraft, they have regional flying, they serve hundreds of markets, etc etc etc.

As much as the Spirit business model is successful, we really do need the other business model(s) as well. The current mergers and associated capacity draw-downs are part of equalizing the marketplace, better matching it to the future trends. Hopefully there will still be something for everyone, the carriers will still make money, and the industry will be healthier for it.

-Dave
-Dave