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SPR-2004-07 - FLY SPIRIT MD-80 AD
SPR-2005 9 MTHS
SPR-2005-STATS TOP LCC
SPR-2011-12 - A320 ORDER
SPR-2013-04 - UPDATE
SPR-2014-08 TOP 15 AIRPORTS
SPR-2014-09 - NEW LIVERY ON A319
SPR-2014-09 - NEW LIVERY-A
SPR-2014-12-LUFTHANSA TECHNIK PUERTO RICO
SPR-SUMMER NETWORK 2014
FORMED IN 1980 AND STARTED OPERATIONS IN 1990. FORMERLY CAMAIR INTERNATIONAL & CHARTER ONE SPIRIT AIRLINES. DOMESTIC, SCHEDULED & CHARTER, PASSENGER, JET AIRPLANE SERVICES.
2800 EXECUTIVE WAY
MIRAMAR, FLORIDA FL 33025-6542, USA
USA (United States of America) was established in 1776, it covers an area of 9,363,123 sq km, its population is 280 million, its capital city is Washington DC, and its official language is English.
NOVEMBER 1995: FROM DETROIT METROPOLITAN AIRPORT, TO PHILADELPHIA. CURRENTLY, DETROIT TO 4 FLORIDA POINTS, & ATLANTIC CITY. TO ATLANTIC CITY, BOSTON, CLEVELAND, DETROIT, FORT MEYERS, FORT LAUDERDALE, MYRTLE BEACH, ORLANDO, AND TAMPA.
MARCH 1996: DETROIT TO BOSTON, & TO MYRTLE BEACH, SOUTH CAROLINA.
TAKEN OVER BY COMAIR (COI) PARENT COMPANY, COMAIR HOLDINGS, BUT WILL BE OPERATED INDEPENDENTLY, FROM DELTA AIRLINES (DAL) CONNECTION (COI).
JUNE 1996: 2 DC-9-41'S (47604; 47605), EX-FINNAIR (FIN).
FEBRUARY 1997: TO BERMUDA (DC-9, 117 PAX).
MARCH 1997: 1 DC-9-31 (JT8D-9A), EX-VALUJET (VAU).
JUNE 1997: 450 EMPLOYEES.
HAS SUNJET INTERNATIONAL (SJI) CONTRACT, TO FLY (SJI) NETWORK FROM ATLANTA TO ST PETERSBURG, FORT LAUDERDALE, ORLANDO, AND NEWARK.
KENT ELSBREE (CEO) WORLD TECHNOLOGY SYSTEMS, WHO OWNS (SJI), SAID (CMI) WILL PROVIDE GREATER DEPENDABILITY.
1996 FISCAL YEAR (FY) = -$6 MILLION (NET LOSS): 750,000 PASSENGERS (PAX).
1 DC-9-31 (46202), EX-VALUJET (VAU).
SEPTEMBER 1997: GIVEN EXEMPTION, MELBOURNE, FLORIDA, TO NEW YORK LAGUARDIA NONSTOP. ATLANTIC CITY TO BERMUDA.
OCTOBER 1997: 1ST 9 MONTHS >$1 MILLION PASSENGERS (PAX). NOW 13 AIRPLANES, AND DOES OWN MAINTENANCE AND TRAINING.
DC-9-21 (47302) BROKEN UP FOR PARTS.
DECEMBER 1997: 1 DC-9-32 (47111), EX-CONTINENTAL AIRLINES (CAL), TRITON LEASED.
JANUARY 1998: MYRTLE BEACH TO NEW YORK/NEWARK, CLEVELAND, AND CHICAGO. MYRTLE BEACH - ORLANDO (NONSTOP).
1997 = +$1 MILLION (NET PROFIT).
1 MD-82 (49144), EX-GREAT AMERICAN, FROM (NKR), JAPAN.
MARCH 1998: RECEIVES THE DEPARTMENT OF TRANSPORTATION (DOT) OK FOR SCHEDULED COMBI SERVICE, FROM ANY POINT IN USA TO ANY POINT IN CANADA (DC-9). ALSO, SCHEDULED SERVICE TO ATLANTIC CITY, AND BERMUDA.
2 MD-80'S, EX-RENO AIR (RNO).
APRIL 1998: 450 EMPLOYEES.
JUNE 1998: TO EXPAND AND ACQUIRE MORE AIRPLANES.
1ST 5 MONTHS = +82.6% (RPM) TRAFFIC, +86.5% (ASM) CAPACITY, 78.3% LF LOAD FACTOR. EXPECTS 1.4 MILLION PASSENGERS IN 1998.
UTILIZATION ON DC-9'S FROM 6.4 TO 7.5 HOURS, IN 1998. PUSHING FOR 8 HOURS.
SOLD 1 DC-9-31 (47547) TO US NAVY (USN). 1 MD-82, EX-FAR EASTERN AIR TRANSPORT (FAT) (53168), 165 PAX. 13 DC-9'S, 117 PAX.
JULY 1998: PLANS FOR +3 MD-80'S, IN ANTICIPATION OF INCREASE IN SERVICE TO FLORIDA, WILL REPLACE DC-9'S, AND FLEET OF 16.
1ST 6 MONTHS = +80.7% (RPM) TRAFFIC, +80.2% (ASM) CAPACITY, +92.2% PASSENGERS (PAX).
AUGUST 1998: DC-9-31 (47526) BOUGHT OFF LEASE FROM AVTEAM, FLORIDA, & SOLD & LEASED BACK DC-9-32 (45788), TIL DECEMBER 1999.
SEPTEMBER 1998: MD-82 (JT8D-217) (48048), EX-RENO (RNO), SPIRIT SILVER SPRING LEASED.
OCTOBER 1998: FLEW ITS 1 MILLIONTH PASSENGER (PAX), - - WHO RECEIVED CHAMPAGNE, FLOWERS, & GIFT CERTIFICATE, FOR VACATION TO >12 DESTINATIONS.
1997 = +$895,000 (-$4.82 MILLION).
MD-82 (48087), EX-RENO AIR (RNO), SPIRIT SILVER SPRING LEASED.
DECEMBER 1998: 2 DC-9-30'S (47202, 326) "C" CHECKS AT AVTEL SERVICES. DC-9-32 (48111), EX-CONTINENTAL AIRLINES (CAL).
JANUARY 1999: NEW YORK LAGUARDIA, & ISLIP - FORT LAUDERDALE.
1998 = 1.16 BILLION (RPM) TRAFFIC (+82.1%); +86.2% (ASM) CAPACITY; 76.4% LF LOAD FACTOR (-1.7); 1.42 MILLION PASSENGERS (PAX) (+79.1%); +$6.7 MILLION.
MD-87 (49777), EX-TARGET AIRWAYS (GREAT AMERICAN) (GAR).
FEBRUARY 1999: 1 MD-83 (49619), EX-AERO LLOYD (ACH), SANWA LEASED, & MD-82 (49104), EX-ALASKA AIRLINES (ASA), UNICAPITAL LEASED.
MARCH 1999: MOVES ITS CORPORATE HQ TO MIRAMAR, FLORIDA. ITS MAINTENANCE CENTER WILL REMAIN IN DETROIT WITH 700 EMPLOYEES, AND WILL EXPAND. EXPECT >350 TO STAFF NEW HQ, IN NEW 56,000 SQ FT, EXECUTIVE OFFICES (ONE-FLOOR). DURING NEXT 2 YEARS, WILL SEARCH FOR 50 - 60,000 SQ FT, MAINTENANCE FACILITY, FOR SEVERAL HUNDRED EMPLOYEES, FOR 2/3 AIRPLANES HEAVY MAINTENANCE.
MD-83 (53014), EX-AERO LLOYD (ACH), FLEET CAPITAL (NEW NAME FOR SANWA) LEASED.
APRIL 1999: MARK KAHAN (SPR) VICE CHAIRMAN & COO ELECTED PRESIDENT OF AIR CARRIER ASSOCIATION OF AMERICA (ACAA).
NONSTOP DETROIT - LOS ANGELES (LAX). LATER THIS YEAR, EXPANSION TO CENTRAL AMERICA AND THE CARIBBEAN.
1ST QUARTER = +115.1% (RPM) TRAFFIC, +107.6% (ASM) CAPACITY, +2.9% LF LOAD FACTOR, +89.2% PASSENGERS (PAX).
MD-82 (49104) "C" CHECK AT PEMCO, VICTORVILLE, CALIFORNIA. 4 ORDERS MD-82'S, EX-CHINA EASTERN (CEA), (GECAS) (GEH) LEASED.
JULY 1999: 1ST 6 MONTHS = 1.06 BILLION (RPM) TRAFFIC (+103%) +105.2% (ASM) CAPACITY , 77.8% LF LOAD FACTOR (-.9), 1.17 MILLION PASSENGERS (PAX) (+77%).
2 MD-81'S (48051; 48058), EX-FAIRLINES (FAN), FROM SANWA. PLANS TO ACQUIRE 5 MD-80'S, EX-AUSTRIAN AIRLINES (AUL), WITH 3 IN 1999, AND 2 BY DECEMBER 2000.
SEPTEMBER 1999: AIRLINE RELOCATES FROM DETROIT TO FORT LAUDERDALE, FLORIDA.
OCTOBER 1999: 1 MD-81 (48015), EX-AUSTRIAN AIRLINES (AUL).
NOVEMBER 1999: 2 MD-81'S (48017; 48021), EX-AUSTRIAN AIRLINES (AUL), DELIVERIES. +2 (49115; 49164), IN 4TH QUARTER 2000.
JANUARY 2000: 1999 = 2.20 BILLION (RPM) TRAFFIC (+90%), +95.4% (ASM) CAPACITY, 74.3% LF LOAD FACTOR (-2.1), 2.37 MILLION PASSENGERS (PAX) (+67%).
1 MD-82 (49415), EX-CHINA NORTHERN (SHY). 1 DC-9-31 (47326) AIRFRAME ONLY, PART OUT, PURCHASED OFF LEASE. 1 MD-83 (53015), AEROLLOYD (ACH) LEASED.
APRIL 2000: CELEBRATES 10 YEAR ANNIVERSARY, BY PAINTING 1 MD-83 (49619, N814NK), EX-AERO LLOYD (ACH), WITH VIVID COLOR SCHEME, WITH A PROUD "CELEBRATING 10 YEARS!" BANNER.
JUNE 2000: IN JULY 2000, DETROIT METRO - NEW YORK LAGUARDIA (MD-80).
1 MD-82 (49140), EX-CHINA EASTERN AIRLINES (CEA), (GECAS) (GEH) LEASED.
JULY 2000: IN OCTOBER 2000, TO REAGAN NATIONAL, & CHICAGO (ORD) (MD-80). ALSO, (ORD), TO FORT MYERS, FORT LAUDERDALE, & ORLANDO.
SPIRIT AIRLINES (SPR) IS IN PROCESS OF MOVING TO THE CITY OF MIRAMAR, FLORIDA. 25% OF OPERATIONS HAS RELOCATED, & REST OF STAFF TO MOVE BY 2001.
1999 = -$7.69 MILLION (+$6.67 MILLION): 3.55B (RPK) TRAFFIC (+90.1%); 74.3% LF LOAD FACTOR; 212,000 (FTK) FREIGHT TRAFFIC; 2.38 MILLION PASSENGERS (PAX) (+67%); 1,884 EMPLOYEES (+57.5%).
DC-9'S TO BE REPLACED BY MD-80'S. 2 MD-81'S (48016; 48018), EX-AUSTRIAN AIRLINES (AUL), SAFAIR (SFA) LEASED.
AUGUST 2000: 1 ORDER (OCTOBER 2000) MD-82 (49374), EX-KOREAN AIR (KAL), (GEH) LEASED. 2 ORDERS (DECEMBER 2000) MD-83'S (53014; 53015), EX-AERO LLOYD (ACH), (GEH) LEASED. BY THE END OF 2000, TO OPERATE 6 DC-9'S, & 22 MD-80'S.
SEPTEMBER 2000: 1,973 EMPLOYEES (INCLUDING 213 FLIGHT CREW (FC), 853 CABIN ATTENDANTS (CA), & 307 MAINTENANCE TECHNICIANS (MT)).
DC-9-32 (47514) SOLD TO INTERGLOBAL (IGI). 2 MD-82'S (49141, N817NK; 49508, N603CA) DELIVERIES.
OCTOBER 2000: 1ST 9 MONTHS = 2.04 BILLION (RPM) TRAFFIC (+25.2%), +28.2% (ASM) CAPACITY, 74.9% LF LOAD FACTOR (-1.8); 2.1 MILLION PASSENGERS (PAX) (+18.3%).
NOVEMBER 2000: DOES "A" & "B" CHECKS, + ENGINE WORK, IN-HOUSE, AT 100,000 SQ FT FACILITY AT DETROIT METRO AIRPORT. LOOKING AT JOINT VENTURE WITH HEAVY MAINTENANCE TO BE LOCATED IN TEXAS, AND WILL PURSUE 3RD PARTY WORK ON OTHER MODELS, AS WELL AS THE DC-9/MD-80'S.
1 MD-82 (49126), EX-AEROMEXICO (AMX), CIT AEROSPACE (TCI) LEASED.
DECEMBER 2000: IN FEBRUARY 2001, NEWARK - MELBOURNE, FLORIDA.
1 MD-81 (48016, N819NK), SAFAIR (SFA) LEASED. 1 ORDER (FEBRUARY 2001) MD-82, GECAS (GEH) LEASED, AND 1 ORDER (FEBRUARY 2001) MD-83, WATCH HILL CAPITAL LEASED. 2 MD-83'S (53014; 53015), EX-AEROLLOYD (ACH).
JANUARY 2001: 2000 = 2.77 BILLION (RPM) TRAFFIC (+25.5%), +26.5% (ASM) CAPACITY, 73.8% LF LOAD FACTOR (-.5), 2.84 MILLION PASSENGERS (PAX) (+19.8%).
IN MARCH 2001, CHICAGO (ORD) - MYRTLE BEACH.
BOB BRESNAHAN, SENIOR VP MAINTENANCE & ENGINEERING.
FEBRUARY 2001: 4TH QUARTER = -$2.94 MILLION.
MD-82 (49141), EX-CHINA EASTERN AIRLINES (CEA), (GECAS) (GEF) 52 MONTH LEASED.
MARCH 2001: IN SUMMER, TO LOS ANGELES (LAX), AND OAKLAND. IN 5/01, CHICAGO (ORD) - LOS ANGELES (LAX), & DETROIT - OAKLAND. IN 7/01, (ORD) - ATLANTIC CITY.
APRIL 2001: 1ST Q = +$4.6 Million (+6.7%): .9 Billion RPM (+14.9%); 895,000 PAX (+12.5%).
SERVICES TO 14 DESTINATIONS IN EASTERN USA.
1 MD-83 (49392), EX-CONTINENTAL AIRLINES (CAL), WATCH HILL LEASED.
MAY 2001: 1,973 EMPLOYEES.
AGREEMENT WITH 2 AIRLINES FROM VENEZUELA: SANTA BARBARA AIRLINES (BBR), AND AVIOR, WHO WILL COMBINE TO WET-LEASE SPIRIT AIRLINES (SPR) AIRPLANES, TO FLY FROM 2 POINTS IN VENEZUELA TO FORT LAUDERDALE.
PATRICK STRASBURGER VP GROUND OPERATIONS.
JUNE 2001: CHICAGO (ORD) - ATLANTIC CITY IN 7/01.
1 MD-83 (53012), EX-AERO LLOYD (ACH). 1 DC-9-41 (47605) 4 YEAR LEASED TO DINAR (DIR).
JULY 2001: IN 11/01, DETROIT TO WEST PALM BEACH. ALSO, CHICAGO (ORD) TO TAMPA.
1ST 6 MONTHS = 1.83 Billion RPM (+31.1%), +26.8% ASM, 77.1% LF (+2.5), 1.84 Million PAX (+28.2%).
AUGUST 2001: IN 11/01, TO SAN JUAN.
1,911 EMPLOYEES (INCLUDING: 244 FLIGHT CREW (FC); 456 CABIN ATTENDANTS (CA); 246 MAINTENANCE TECHNICIANS (MT); 51 GENERAL MANAGEMENT; 23 AIRPLANE CONTROL; 720 PASSENGER HANDLING; 33 TRAINEES, INSTRUCTORS; 120 RECORDKEEPING; 18 TRAFFIC SOLICITORS). EMPLOYEE PRODUCTIVITY (ASM'S/EMPLOYEE): 2,130,455.
TOP 10 SPIRIT AIRLINES (SPR) AIRPORTS:
1 DETROIT 1,200; 2 FORT LAUDERDALE 1,185; 3 NEW YORK LAGUARDIA 895; 4 ATLANTIC CITY 773; 5 ORLANDO 750; 6 NEW YORK/NEWARK 639; 7 FORT MYERS 553; 8 MYRTLE BEACH 471; 9 TAMPA 381; 10 WEST PALM BEACH 370.
1 DC-9-31 (JT8D-7) (603-47526), LEASED TO AEROREPUBLICA (REO).
SEPTEMBER 2001: FOLLOWING AIRLINE INDUSTRY DOWNTURN, IN AFTERMATH OF ISLAMIC, TERRORIST ATTACK ON NEW YORK WORLD TRADE CENTER (WTC) TOWERS, & PENTAGON, SPIRIT AIRLINES (SPR) WILL CUT ITS SCHEDULE BY -40%, FOR 6 WEEKS, THEN RESUME OPERATING 80%. HAS FURLOUGHED -700 OF ITS 2,400 EMPLOYEES, OF WHICH 250, VOLUNTEERED FOR FURLOUGH, TO HELP THOSE EMPLOYEES, WHO COULD NOT AFFORD IT. EXECUTIVES TO TAKE -25% CUT IN PAY.
MD-82 (1045-48020, N823NK), WELLS FARGO LEASED.
OCTOBER 2001: 2ND Q MAINTENANCE COSTS = $16.04 Million (-4.4%).
IN 11/01, SEASONAL, CHICAGO (ORD) - TAMPA, & 12/01, (ORD) - WEST PALM BEACH.
NOVEMBER 2001: TO SAN JUAN, PUERTO RICO (MD-80, 2/DAY).
3RD Q MAINTENANCE COSTS = $17.14 Million (-7.6%).
DECEMBER 2001: NEW YORK LAGUARDIA - FORT MYERS.
JANUARY 2002: IN 5/02, DETROIT - LOS ANGELES (LAX)/OAKLAND. (LAX) - NEW YORK LAGUARDIA. (LAX) ONE-STOPS, TO FORT LAUDERDALE, TAMPA, & MYRTLE BEACH. CHICAGO (ORD) TO MYRTLE BEACH, AND ON TO SAN JUAN, + DAILY TO TAMPA, AND ORLANDO. SEASONAL, ATLANTIC CITY - MYRTLE BEACH, & DENVER - FORT LAUDERDALE.
4TH Q MAINTENANCE COSTS = $15.77 Million (+19.2%).
MARCH 2002: (TELEPHONE: (954) 447-7965). (FAX: (954) 447-7979).
SCOTT JUSTMANN, SENIOR VP FLIGHT OPERATIONS.
APRIL 2002: 1ST Q = 341.33 Million RPM (TRAFFIC) (-5.7%); +.3% ASM (CAPACITY), 71.9% LF (LOAD FACTOR) (-4.6); 835.05K PASSENGERS (PAX) (-6.7%). 1ST Q = 1.36 Billion RPK (-6.14%); -2.17% ASK; 71.8% LF (-3); 823,000 PAX (-8.04%); 194,000 FTK (FREIGHT TRAFFIC) (+98.51%).
MAY 2002: IN 7/02, DETROIT - LAS VEGAS (DAILY NONSTOPS), WITH CONNECTING SERVICE TO FORT MYERS, FLORIDA. NOW SERVES 15 DESTINATIONS.
DC-9-41 (47605) RETURNED FROM DINAR (DIR).
July 2002: 2001 = +$2.84 Million (-$20.92 Million): 5.38 Billion RPK (+11.6%); 73.3% LF; 3.38 Million PAX (+9.3%); 2,203 employees (+15.3%). 6 months = 2.93 Billion RPK (-1.88%); +3.58% ASK; 72% LF (-4); 1.73 Million PAX (-6.35%); 337,000 FTK (+77.69%).
MD-83 (N827NK) painted in new shaded blue livery.
August 2002: Spirit Sirlines (SPR) application for US Federal loan guarantees ($54 Million guarantee for $60 Million loan), was rejected.
September 2002: In 10/02, Orlando to Los Angeles (LAX), for 104 flights daily operations to 15 cities.
MD-87 (49777) returned to Finova (GRB).
October 2002: Grady Reed, Senior VP Safety, ex-Northwest Airlines (NWA).
November 2002: Atlantic City/Detroit - West Palm Beach. In 12/02, Chicago - Las Vegas.
April 2003: 1 MD-83 (49823), ex-MD Airlines (MDR), Triton (TIA) leased.
July 2003: Selects eRev solution as the framework to manage revenue accounting across the Spirit Airlines (SPR) network.
August 2003: Wins 4 slots at Ronald Reagan Washington National Airport in a national lottery. Expects to start new flights there in 10/03.
2 MD-82's (1754-49931, N829NK; 1756-49932, N830NK), Debis AirFinance (DEA) leased.
September 2003: 2002 = (+$2.8 Million): 6.57 Billion RPK (+23.2%); +23.6% ASK; 73.4% LF (-.3); 3.9 Million PAX (+16.6%); 759 Million FTK (+70.6%); 2,345 EMPLOYEES (-2.3%).
2002 TOP WORLD AIRLINES PASSENGER TRAFFIC RPK (Billion):
86 (SBR) 7.48; 87 (MTH) 7.09; 88 (KUW) 6.71; 89 (VIE) 6.60; 90 (SPR) 6.57; 91 (BMA) 6.56; 92 (LNK) 6.41; 93 (RAM) 6.38; 94 (BTA) 6.36; 95 (QTA) 6.20; 96 (COI) 5.96; 97 (EGF) 5.94; 98 (LOT) 5.87; 99 (FRO) 5.49; 100 (WJI) 5.49.
October 2003: 3rd Q = 81.9% LF (load factor).
2 MD-83's (1464-49617, N831NK; 1611-49618, N832NK), Finova (GRB) leased.
November 2003: Fort Lauderdale - Mrytle Beach. In 12/03, Fort Lauderdale - Cancun.
Reduces seating capacity on its MD-80's from 156 to 150.
DC-9-32 (923-48111) sold to Jetran. MD-83 (49847) bought from Mycal Finance.
December 2003: Plans to expand its Fort Lauderdale operations with additional services to the Caribbean and Central America. Has applied for authority to fly to Aruba, the Bahamas, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Nicaragua, and Panama. Also applied for Detroit to points in Canada.
MD-83 (49449, N833NK), Debis AirFinance (DEA) leased.
February 2004: To sell majority stake to Oaktree Capital Management for $100 - $125 Million. Funds to be used for acquiring more airplanes with intentions to acquire about 60 new airplanes to replace its fleet of 32 airplanes in the next 3 - 7 years. Ned Homfeld, Chairman and Founder is to retire.
Spirit Airlines (SPR) has 115 flights/day to 16 destinations. Detroit has 22 flights/day to 13 destinations and is 2nd only to Northwest Airlines (NWA) at Detroit where it has 5% of the market.
Will introduce e-service kiosks in 3/04.
Department of Transportation (DOT) OK for international flights to 11 countries including Aruba, the Bahamas, Canada, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Nicaragua, and Panama.
MD-83 (1777-53045, N833RA), GECAS (GEF) leased.
March 2004: $5 Billion, 35/60 orders (3/05) A319's, 124 PAX/A321 220 PAX (V2500), with 2-class seating: Spirit Plus (C), and regular economy (Y); to replace 32 MD-80's. Jacob Schorr (CEO) stated "Spirit was predisposed to order 737NGs for growth and to replace its 32 MD-80's owing to its experience operating the former McDonnell Douglas, now Boeing airplanes. However, Airbus pursued the negotiation with greater seriousness and diligence."
April 2004: Oaktree Capital Management who earlier (2/04) had taken a 51% stake in Spirit Airlines (SPR) for $125 Million, has agreed to invest $150 Million in Pegasus Aviation (PSS), an operating lessor.
1st Q = 2.02 Billion RPK (+7.37%); +4.57% ASK; 77.8% LF (+2); 1.16 Million PAX (+15.07%); 1.04 Million FTK (+427.5%).
May 2004: Launched its Spirit Self Check-in program by acquiring 18 Kinetics TouchPort self-service check-in devices: 4 installed at Fort Lauderdale-Hollywood; 8 at Detroit Metro.
Moves delivery forward of 4 A321's, 198 PAX, to 11/04, for Fort Lauderdale to New York LaGuardia, Detroit, and Atlantic City.
June 2004: MD-83 (53015) returned to GATX (GAX).
July 2004: 2003 = +$626,000 (-$19.42M): 7.37 Billion RPK (+11.7%); 78.9% LF; 4.11 Million PAX (+11.4%); 2.58 Million FTK (+215.2%).
Detroit - Washington (DCA).
August 2004: (DOT) OK for 2 daily slot exemptions for Myrtle Beach - Reagan Washington National Airport (2/day).
In 10/04, Providence - Detroit, Fort Lauderdale, Fort Myers. In 11/04, Fort Lauderdale - Santo Domingo.
2 MD-81's (991-48058, N805NK; 975-48051, N806NK), withdrawn from use (WFU) at Fort Worth.
September 2004: 2 MD-82's (49140; 49503), returned to (GEF). A321-231 (1195, N583NK) (ILF) leased.
October 2004: In 11/04, Atlantic City to West Palm Beach. In 12/04, Detroit - West Palm Beach. In 1/05, Fort Lauderdale - Nassau.
2 A321-231's (1408, N584NK; 1794, N586NK), Airbus (AFIS) leased.
November 2004: 15-year Total Component Support contract with Lufthansa (DLH) Technik (LTK) for its new A320 fleet.
Fort Lauderdale to Santo Domingo, with connecting services from Atlantic City, Cancun, Chicago O'Hare, Detroit, New York LaGuardia, & Reagan Washington National Airport.
January 2005: Ben Baldenza President & (COO), ex-US Airways (USA). Patricia Willis VP Labor Relations.
MD-82 (48021) WFU in storage.
March 2005: 2 A319-132's (2424, N501NK; 2433, N502NK), (ILF) leased.
May 2005: In 11/05, Orlando to Nassau (nonstop).
MD-81 (48018, N818NK), sold to American Aircraft Company. MD-82 (48048, N801NK), sold to Avioserv San Diego. MD-82 (49126, N820NK), returned to CIT (TCI).
June 2005: 2,700 employees.
In 11/05, New York LaGuardia to Nassau (A319, daily).
4 A319-132's (2470, N503NK "Spirit of the Caribbean;" 2473, N504NK "Spirit of the Bahamas;" 2485, N505NK; 2490, N506NK) & 1 A321-231 (2476, N587NK), (ILF) leased. MD-83 (49793), returned to Finova Capital (GRB) leased to SwiftAir (SWF). MD-83 (49449), returned to lessor.
July 2005: Received $100 Million of new financing under agreements with Oaktree Capital Management and Goldman Sachs. $70 Million will come from existing investors, including Oaktree and Spirit Airlines (SPR) managemment, and $30 Million from Goldman Sachs.
Is now 100% fuel hedged for remainder of 2005.
MD-83 (49617) returned to Finova (GRB) lessor.
August 2005: 2,800 employees (+3.7%).
MD-83 (53012) returned to Bayerische Landesbank.
September 2005: Spirit Airlines (SPR) will begin daily service to Dallas/Fort Worth (DFW) from Fort Lauderdale in 01/06 using an A319, becoming the 6th low-fare carrier to serve (DFW). (SPR) operations will start with one gate in Terminal E. (DFW) offered it a $250,000 incentive package designed to attract new low-fare service using the gates vacated by Delta Air Lines (DAL).
Spirit Airlines (SPR) selected the (IAE) (V2500) to power 3 A321s. The deal, including a long-term fleet hour agreement, was valued at more than $50 million by (IAE). The A321s are in addition to 15 firm orders already placed by Spirit Airlines(SPR), according to (IAE). The Florida-based (LCC) also has options on 47 airplanes and plans to lease an additional 20 A320 family airplanes.
2 A319-132's (2560, N507NK; 2567, N508NK), (S A L E) (SIL) leased.
October 2005: US Airways (USA) named Hal Huele Senior VP Technical Operations. Huele, 57, most recently was Senior VP Safety & Regulatory Compliance. He replaces John Prestifilippo, who joined Spirit Airlines (SPR) as Senior VP Technical Operations. Also departing US Airways (USA) for Spirit (SPR) was Managing Director Europe Tony Lefebvre, who becomes Senior VP Customer Service for (SPR).
A319-132 (2567, N508NK), (ACG) leased. A321-231 (2590, N588NK), (ILF) leased.
November 2005: Spirit Airlines (SPR) will inaugurate nonstop service from Fort Lauderdale to Punta Cana (Dominican Republic) on December 10th. (SPR) will operate a daily flight. (SPR) launched daily direct service between New York LaGuardia and Nassau aboard an A319. The flight used to connect through the (LCC)'s Fort Lauderdale hub. (SPR) also inaugurated service from Fort Lauderdale to Montego Bay, Kingston and Orlando. (SPR) will inaugurate nonstop service from Orlando to Montego Bay on December 14th. (SPR) will operate 3x-weekly on Thu/Sat/Sun.
MD-81 (48015) parted out to Magnum AiDynamics. 2 A319-132's (2603, N509NK; 2622, N510NK), (SALE) (SIL) leased.
December 2005: MD-81 (48016, N819NK), sold to American Aircraft. A319-132 (2622, N510NK), delivery.
January 2006: Spirit Airlines (SPR) launched service from Dallas/Fort Worth (DFW) to its Fort Lauderdale hub aboard 2-class A319s. Spirit Airlines (SPR) became the 6th low-cost carrier to begin operating out of Dallas/Fort Worth International Airport. "(SPR) brings low fares, a 1st-class option and some of North Texas's favorite destinations," said Joe Lopano, (DFW)'s Executive VP Marketing & Terminal Management. "With 6 low-cost carriers (LCC)s now flying out of (DFW), we continue to provide the best location for competition in North Texas." Fort Worth-based American Airlines (AAL) will likely match Spirit (SPR)'s fares, said Tim Smith, a spokesman at American (AAL). (AAL), Delta Air Lines (DAL) and Continental Airlines (CAL) had matched many of the fares. Fort Lauderdale-based (SPR) bills itself as the "best-capitalized, low-fare carrier to the Caribbean," with hubs in Detroit and Fort Lauderdale and service to 28 cities in the USA, Bahamas, and the Caribbean. (SPR) received a $250,000 incentive package from (DFW) Airport, according to the Dallas Business Journal. (SPR) will operate its new A319s out of one gate in Terminal E.
(SPR) named Jeffrey Carlson VP Flight Operations & Director Operations. He came from Northwest Airlines (NWA).
A319-132 (2659, N511NK), (ILF) leased.
February 2006: Spirit Airlines (SPR) announced service increases for Detroit as follows to:
Atlantic City = Resumes on May 19th;
Myrtle Beah = Increase from 7x- to 8x-weekly on May 6th (2 Saturday flights);
New York LaGuardia (LGA) = Increase from 3x- to 4x- a day on May 1st;
Orlando = Increase from 3x- to 4x- a day on June 15th;
San Francisco = New service from May 25th;
New flights are served with an A319.
3 A319-132's (2673, N512NK; 2679, N514NK; 2698, N515NK), (ILF) leased.
March 2006: 2 A319-132's (2704, N516NK; 2711, N517NK), (ILF) leased.
April 2006: Spirit Airlines (SPR) will inaugurate nonstop service from Detroit Metro to Boston on August 15th. (SPR) will operate 2x-daily using an A319.
(SPR) added its 16th A319. (SPR) will take 9 additional A319s this year and will operate an all-Airbus fleet by fall.
A319-132 (2718, N518NK), (ILF) leased.
May 2006: Spirit Airlines (SPR) promoted President & (COO) Ben Baldanza, 44, to (CEO), replacing Jacob Schorr, 61, who left the (CEO) post but will remain as Chairman. Baldanza has been with (SPR) since January 2005. South African Airways (SAA) appointed ex-(SPR) VP Sales & Distribution, Marc Cavaliere as Executive VP North America based at (SAA)'s USA headquarters in Fort Lauderdale.
A319-132 (2723, N519NK), (ILF) leased.
June 2006: Effective December 14, 2006, Spirit Airlines (SPR) will add service from Fort Lauderdale to Kingston, Santo Domingo, San Juan, Washington Reagan National, and New York LaGuardia.
2 MD-83's (49847; 53168), returned to lessor. 2 A319-132's (2784, N520NK; 2797, N521NK), (ILF) leased.
July 2006: Spirit Airlines (SPR) flew 372.5 million (RPM)s passenger traffic in June, a -4.1% drop from the year-ago month. Capacity fell -3.6% to 453.7 million (ASM)s and load factor declined -0.4 point to 82.1% LF.
(SPR) operates scheduled, domestic and international services.
Employees = 2,800.
(IATA) Code: NK - 487. (ICAO) Code: NKS (Callsign - SPIRIT WING).
Parent organization/shareholders: Oaktree Capital Management (51%); & privately held (49%).
Main Base: Fort Lauderdale Hollywood International Airport (FLL).
Hub: Detroit Willow Run (YIP).
Domestic, scheduled destinations: Atlanta; Atlantic City; Chicago; Dallas; Detroit; Fort Lauderdale; Fort Myers; Las Vegas; Los Angeles; Myrtle Beach; New York; Orlando; Providence; Tampa; Washington; & West Palm Beach.
International, scheduled destinations: Cancun; Grand Cayman Island; Grand Turk Island; Kingston; Montego Bay; Nassau; Providentiales; Punta Cana; Saint Thomas; San Juan; San Salvador; & Santo Domingo.
(SPR) announced that Indigo Partners, the Arizona-based investment firm run by former America West Airlines (AMW) Head, William Franke and Oaktree Capital Management of California, which already is a Spirit (SPR) investor, "will provide significant resources for the Company to consolidate its position as the leading low-cost carrier to the Caribbean and pursue its long-term growth strategy." Franke has been named (SPR)'s Chairman, a role he also holds at Wizz Air (WZZ) and Tiger Airways (TGR). The amount of the investment was not disclosed. "Indigo and Oaktree provide (SPR) with significant industry experience and financial strength," recently appointed President and (CEO) Ben Baldanza said. "This new investment shows their commitment to (SPR)'s success." Franke said Indigo looked at the business plans of several USA Low Cost Carriers (LCC)s and was "particularly attracted to the (SPR) opportunity."
(SPR) operates 30 airplanes on 130 daily flights to 30 destinations. It is replacing its MD-80 fleet with A320 family airplanes, a process that has cost millions, but should conclude in September. It lost -$62.1 million in 2005, narrowed from a -$93.2 million loss in 2004.
August 2006: Spirit Airlines (SPR) flew 423.6 million (RPM)s passenger traffic in July, a -5.6% drop from the year-ago month. Capacity fell -4.3% to 511 million (ASM)s and laod factor declined -1.2 points to 82.9% LF.
(SPR) launched service from Boston to Detroit (2x-daily) and Myrtle Beach (daily) aboard A319s. Spirit Airlines (SPR) will launch daily Fort Lauderdale - Las Vegas flights on November 15, supplementing its current service, via Detroit Metro.
MD-81 (48017), sold to Magnum Aerodynamics; MD-82 (49144), returned to lessor; MD-83 (49392), returned, leased to Aeropostal (LAV).
October 2006: USA legacy carriers have made substantial progress in becoming more competitive but still trail low-cost carriers (LCC)s in a number of areas related to labor efficiency, a new analysis by the USA Department of Transportation's Bureau of Transportation Statistics (BTS) confirms. The analysis, based on Form 41 data filed by 7 network carriers, and 7 budget airlines, reveals that (LCC)s reduced the number of full-time-equivalent employees (FTE) per airplane by -16%, from 92 in the 1st quarter of 2001 to 77 in the 1st quarter of 2006, while the network carriers reduced their (FTE)s per airplane by -23% but still averaged 99 at the end of the study period, +28.6% higher than the (LCC) group.
Among network carriers, United Airlines (UAL) showed the largest gain as (FTE)s dropped -27.5% from 160 to 116. US Airways (USA) (which was counted in the network group, while America West Airlines (AMW) was included in the (LCC) group), and Northwest Airlines (NWA) had the fewest employees per airplane at the end of the 1st quarter with 82.
In terms of percentage reduction in (FTE)s, JetBlue Airways (JBL) led the low-cost group as it went from 127 in 2001 to 95 in 2006. In numeric terms, however, most (LCC)s did better: Spirit Airlines (SPR)had 62 (FTE)s per airplane as of the 2006 1st quarter, followed by AirTran Airways (CQT) (64), Southwest Airlines (SWA) (70) and America West (AMW) (83).
The (LCC)s also boarded an average of +67% more passengers per (FTE) than their network counterparts, 195 to 117. (SWA) led all airlines at 234 enplanements per (FTE) in the 1st quarter, up from 203 5 years earlier. On a percentage basis, AirTran (CQT)performed better, rising from 173 to 220. Among network airlines, (USA) led the group with 149 enplanements and (UAL) lagged at 102, although this was up from 65 in 2001. Overall, the network group improved from an average of 85 enplanements per (FTE) to 117, while the (LCC) group rose from 164 to 195. Turning to compensation (salary plus benefits), network carriers reduced their annual compensation cost gap to $7,514 compared to $22,139 in 2001, (BTS) reported. (SWA)'s average annual compensation led the industry at $95,555. Among legacy airlines, (NWA) was highest at $91,613, and (USA) was the lowest at $73,642. Among the (LCC)s, Frontier Airlines (FRO) had the lowest average employee compensation at $55,432 and AirTran (CQT) was 2nd-lowest at $59,637.
MD-82 (49141, N817NK), scrapped at (FLL).
November 2006: Spirit Airlines (SPR) is taking delivery of five new A319s through year end, through a sale and leaseback arrangement with (GECAS) (GEF). 3 have been delivered this month. When the remaining 2 arrive, (SPR)'s fleet will comprise 25 A319s and 6 A321s.
(SPR) announced 3 new routes with daily flights from Fort Lauderdale as follows:
To Las Vegas, starting February 15;
To Los Angeles, starting March 15;
To Myrtle Beach - Boston, starting February 15;
all flights using A319s.
4 A319-132's (2893, N522NK; 2898, N523NK; 2929, N524NK; 2942. N525NK), GECAS (GEF) leased.
December 2006: Spirit Airlines (SPR) applied to operated from Fort Lauderdale to Caracas. If approved, the airline intends to inaugurate daily nonstop service on April 1st using an A319.
MD-82 (49508, N821NK), sold to Andes Airlines (ADZ). A319-132 (2963, N526NK), (GEF) leased.
January 2007: Starting February 8th, new 4/week, Orlando - Nassau and increase from 2 to 3/day, Fort Lauderdale - Nassau, using A319s. Starting February 14th, Orlando - Nassau, increased to 23/week, using A319s. Starting February 15th, new daily Fort Lauderdale - Las Vegas, and new daily Fort Lauderdale - Myrtle Beach - Boston, using A319s. Starting March 22nd, new 3/week, Fort Lauderdale - Port-au-Prince, using A319s. Starting April 5th, Fort Lauderdale - San Jose, Costa Rica, using A319s. Starting April 12th, new 5x-weekly, Fort Lauderdale - Aguadilla, Puerto Rico, using A319s. Starting April 20th, new 3x-weekly, Fort Lauderdale - St Maarten, using A319s. Starting May 1st, Fort Lauderdale (FLL) - Port-au-Prince increased to 7x-weekly, using A319s. Starting May 3rd, new daily Atlantic City - Las Vegas, using A319s. Starting May 23rd, Fort Lauderdale - San Jose, Costa Rica, increased to 7x-weekly, using A319s.
Spirit Airlines (SPR) named David Lancelot as (CFO), succeeding John Severson.
Airbus (EDS) announced that Spirit Airlines (SPR) finalized an order for 30 A319s last month, that along with a previous order for 7 A319s and 7 A321s will more than double the budget carrier's fleet.
The 144-seat, 2-class airplanes will be powered by (IAE) (V2500)s and deliver from October 2009 through mid-2013. Rolls-Royce (RRC) said its share of the engine order is worth $200 million. (SPR) currently operates 25 A319s and 6 A321s from its Fort Lauderdale hub, a mix of purchased and leased airplanes.
2 A319-132s (2978, N527NK), (ILF) leased & (2983, N528NK), delivery.
February 2007: Spirit Airlines (SPR) is charging $10 for a 2nd piece of checked luggage, as part of a policy instituted recently. Additional bags will be allowed, and will cost a minimum of $100 each, with fees rising to as much as $150 per bag, depending on size and/or weight. In addition, initial pieces of checked luggage, that weigh 51 to 70 lbs will cost $25, or $100 if they weigh 71 to 99 lbs. (SPR) has bases in Fort Lauderdale and Detroit.
The USA Senate Commerce and Transportation Committee approved legislation to require the screening of all cargo in the bellies of passenger airplanes within 3 years. The Transportation Security Administration last May approved a rule that did not include such a strict requirement. "The steps proposed in this bill will both improve our existing security system and give the Transportation Security Administration the flexibility to combat new and emerging threats," committee Chairman, Daniel Inouye (Democrat-Hawaii) said in a statement. It was not clear what types of screening will be acceptable. Passenger airlines have strongly opposed 100% screening of belly cargo on grounds that it is impractical and will slow airfreight flow greatly. While yesterday's legislative action was a 1st step toward possible passage, the proposed bill still is a long way from becoming law, which requires passage by the full Senate and House as well as President Bush's signature.
Starting May 3rd, Atlantic City - Las Vegas, & - San Juan. Starting May 4th, Tampa - San Juan, all using A319s. On August 12th, Atlantic City - San Juan, & Tampa - San Juan, are both discontinued.
2 A319-132s (3007, N529NK; 3026, N267NK), (ILF) leased, and 1 A310-132 (3017, N530NK), delivery.
March 2007: Spirit Airlines launched a new fare structure yesterday that includes fees for all checked bags as part an approach it said "liberates customers from being forced into paying for services they do not desire or use."
(SPR) said it will cut fares by as much as -40% and impose the new fee system for all flights operating from June 20. "Customers will be given the allowance of 1 carry-on bag with the option to check additional bags for a fee," it said. The 1st 2 checked bags will be $5 each if booked online or $10 apiece if checked at the airport, with a 3rd bag costing $100. The carrier will charge $1 for each cup of soda, coffee or juice a passenger drinks during flight.
(SPR) becomes the 1st USA airline to charge for checked bags but follows Flybe (BEE), Ryanair (RYR), Aer Lingus (ARL) and Norwegian (NWG) in imposing baggage fees. Air Canada (ACN) offers discounts for customers who do not check bags and British Airways (BAB) limits the number and size of checked bags based on flight distance and is charging up to £120 ($231) for excess bags. Executives from both United Airlines (UAL) and American Airlines (AAL) have said they are considering fees to mitigate escalating handling costs.
"We can offer incredibly low fares by enabling customers to pay for only those options they want. As customers have told us over and over, it's all about the fare," (SPR) (CMO) Barry Biffle said. (SPR) said the move is in line with the "standard product features and options" offered by the "automobile, brokerage and computer industries."
March 2008: Spirit Airlines (SPR) launched a new fare structure that includes fees for all checked bags as part an approach it said "liberates customers from being forced into paying for services they do not desire or use." (SPR) said it will cut fares by as much as -40% and impose the new fee system for all flights operating from June 20. "Customers will be given the allowance of one carry-on bag with the option to check additional bags for a fee," it said. The 1st 2 checked bags will be $5 each if booked online or $10 apiece if checked at the airport, with a 3rd bag costing $100. (SPR) will charge $1 for each cup of soda, coffee or juice a passenger drinks during any flight.
(SPR) becomes the 1st USA airline to charge for checked bags but follows Flybe (BEE), Ryanair (RYR), Aer Lingus (ARL), and Norwegian (NWG) in imposing baggage fees. Air Canada (ACN) offers discounts for customers who do not check bags and British Airways (BAB) limits the number and size of checked bags based on flight distance and is charging up to £120/$231 for excess bags. Executives from both United Airlines (UAL) and American Airlines (AAL) have said they are considering fees to mitigate escalating handling costs.
"We can offer incredibly low fares by enabling customers to pay for only those options they want. As customers have told us, over and over, it's all about the fare," (SPR) (CMO) Barry Biffle said. (SPR) said the move is in line with the "standard product features and options" offered by the "automobile, brokerage and computer industries."
(SPR) will operate daily Las Vegas - Atlantic City flights from May 3.
April 2007: Spirit Airlines (SPR) predicts it will hire 24 to 50 pilots (FC) in 2007.
May 2007: Spirit Airlines (SPR) will operate Fort Lauderdale - San Pedro Sula flights 3x-weekly beginning July 20, becoming daily from November 15. The Honduran city will be Spirit (SPR)'s 3rd Central American destination after San Jose and Guatemala City.
Starts Fort Lauderdale - Guatemala City, Tampa - San Juan, using A319s. Starting June 27th, Fort Lauderdale - Lima, using A319s. On August 12th, stops Atlantic City - San Juan, and Tampa - San Juan. Starting November 8th, Fort Lauderdale - Boston, using A319s.
June 2007: A319-132 (3165, N532NK), (ILF) leased. MD-83 (49415, N815NK), sold to Air Transport Acquisition Corp.
August 2007: Spirit Airlines (SPR) is to close its Detroit pilot (FC) base.
September 2007: Names Martin Harrison Chief Operating Officer (COO) & Executive VP, ex-Easyjet (EZY), Head Crew Resource Planning & Network Operations.
November 2007: Spirit Airlines (SPR) will launch 3x-weekly, Fort Lauderdale - Panama City flights on January 31.
The carrier is hiring for their winter pilot (FC) pool, and expects to hire +40 more pilots (FC) before the end of the year.
A Coalition of Smaller Airlines, a group representing midsize USA carriers including Virgin America (VUS), AirTran Airways (CQT), (SPR), and Frontier Airlines (FRO), is lobbying the USA Department of Transportation to ensure that any new traffic management rules at New York (JFK) do not unduly favor major international airlines. "We've got to find a solution that doesn't shut out smaller airlines, which in many cases are offering premium service at lower fares," (VUS) Vice Chairman Samuel Skinner said. (SPR) (CEO) Ben Baldanza added: "We feel confident that the Department will not allow carriers, that dominate an airport, to decide who can operate at that airport." The airlines fear that (JFK) slots will be tightly controlled and that new entrants will be forced to buy slots from larger carriers.
December 2007: Spirit Airlines (SPR) is interviewing and accepting Flight Crew (FC) applications online, via its Website. (SPR) is conducting 2 classes of 8 to 16 pilots (FC) per month through June of 2008.
January 2008: 2007 Performance Statistics: 11.03 billion (RPK)s traffic (+50.33%); +53.01% (ASK)s; -1.4 load factor 80.7% LF; 593,000 (FTK)s (-30.36%) freight traffic; 6.9 million passengers (+52.5%). SEE ATTACHED - - "SPR-2007-STATS."
A321-231 (1408, N584NK), returned to Pembroke (PEB).
February 2008: Spirit Airlines (SPR) announced an increase in checked-bag fees to $20 from $10 per piece, if checked at the airport and to $10 from $5, if reserved on its website, effective February 20. One carryon item is permitted free of charge.
AirTran Airways (CQT) and (SPR) were awarded slot exemptions at Washington National for service to either Jacksonville or Milwaukee (AirTran (CQT)) and Fort Lauderdale (Spirit (SPR)), the USA Dept of Transportation announced. Routes must be operational by May 3. Midwest Airlines (MWX) was awarded backup authority for a Milwaukee or Kansas City service, if either (CQT) or (SPR) does not commence service.
2 A319-132s (3393, N533NK; 3394, N534NK), (GEF) leased. 2 A321-231s (1195; 1438), returned to Pembroke Capital (PEB), and leased to JetStar (IMU) as (VH-VWZ; VH-VWX), respectively. A321-231 (1794), returned to AerCap (DEA) and leased to Monarch (MON) as (G-OZBR).
March 2008: Martin Harrison (COO) has left the company.
The trend of airlines assessing fees for checked baggage is growing, highlighted by two USA legacy carriers recently deciding to limit economy (Y) passengers to one "free" checked bag, while charging $25 for a second checked bag on a large portion of flights beginning May 5. In March 2007 "Baggage Blues," Air Transport World (ATW) magazine detailed the rising costs borne by airlines related to transporting billions of suitcases, boxes, consumer goods and pieces of sporting equipment each year. Carriers' deteriorating baggage handling record also was chronicled; (IATA) (ITA) estimates that mishandled baggage costs the global industry $3 billion annually. A year later, the baggage handling situation has not improved, according to (SITA), the Information Technology (IT) provider, that specializes in tracking airline baggage. It has estimated that 30 million bags are mishandled annually, a figure that is rising. "We have mishandled more bags compared to last year," VP Airport Services Catherine Mayer said. "But I do believe there is more of a focus on the resolution of this problem than in the past." Driven in part by "the negative attention baggage is getting in the press," the industry appears to realize that changes are needed, she said.
SJ Consulting President Satish Jindel, a leading advocate of airlines moving to an "a la carte" pricing structure, praised United Airlines (UAL) and US Airways (AMW)/(USA) for their decisions to start charging economy (Y) passengers $25 for a 2nd checked bag on many of their routes, but said they and other carriers needed to go further. "They should have charged more ($25 doesn't cover the cost of moving the bag," let alone enable airlines to earn a profit from the carriage), he said. "They're running a business. Everything they do, they should make money off it." He also argues that carriers need to take measures regarding carry-on luggage simultaneously in order for passengers' baggage habits to truly change and lower the overall cost burden. "They should limit economy (Y) passengers to 1 carry-on and business (C) to 2, and charge for checked bags," he said. "That way passengers will bring only what they need and airlines will cover the cost of transporting these bags. People have found it acceptable to pay for meals. Passengers will adjust to this too. It will make the system more efficient for everyone [including passengers] and lower costs for airlines. The industry is moving in the right direction at a snail's pace when the [baggage handling] problem is deteriorating at a hare's pace."
(IATA) (ITA), noting that "baggage handling systems and related processes are working at maximum capacity," has launched a "Baggage Management Improvement Program" and this year aims to find a combination of 6 airlines and airports to participate. (SITA) has signed on to contribute to the program. The intention is "to focus on a few of the airports/airlines with major problems and bring in solution experts to work on identifying and resolving the specific problems," Mayer explained. "This sort of industry collaboration and effort is what is required." (IATA) (ITA) and (SITA) are pushing for greater integration of baggage handling systems to "enable real-time tracking of bags from check-in to arrival." (RFID), which so far had enjoyed only limited deployment, is viewed as a technology that could help in this regard. (IATA) (ITA) estimated that "airlines could save -$733 million in baggage mishandling costs with an investment of $0.10 incremental on the cost of [RFID] baggage labels." It added that the figure does not include "key soft benefits," such as gaining customer loyalty by giving passengers the ability to find out exactly where their bags are at any given time. Installing computer-controlled modern handling systems in airports also may ease the burden. British Airways (BAB), which has gained an unenviable reputation for mishandling baggage owing to several system meltdowns at London Heathrow (LHR) in recent years, boasts that (LHR)'s new Terminal 5 has >10.5 miles of high-tech baggage conveyor belts, the largest such system in Europe. (BAB) claimed the system would allow it to lower its high mishandled baggage rate, estimated at about 25 bags "lost" for every 1,000 passengers, to about 15. The system, which has undergone intensive testing for the last 18 months, is touted as being able to handle 12,000 bags per hour and features "trolleys" that can carry bags as fast as 23 mph. It includes a special network of conveyors designated solely for bags checked late and an area where those checked extremely early can be stored and organized so as not to slow the movement of more pressing bags. A key to improving the process and mitigating losses may lie in changing passengers' perceptions about baggage. (UAl), for example, is selling its decision to charge for checked bags as a way to "offer customers choice, flexibility and low fares." US Airways (AMW)/(USA) President Scott Kirby said it's a matter of being "realistic" in the face of rising fuel costs and growing volumes of baggage. Florida-based, Spirit Airlines (SPR), which unbundles its fares to charge for each service a passenger receives, claimed that charging for checked baggage is "well received by customers because we give them options, they have more control over their ticket price." It also brings discipline to passengers' packing habits and means fewer bags onboard, which translates into less weight and lower fuel burn, (SPR) said.
A321-231 (1794), returned to AerCap (DEA), and leased to Monarch (MON) as (G-OZBR).
May 2008: Spirit Airlines (SPR) reported a -$3.8 million loss in 2007, a significant improvement from its -$79 million deficit in 2006, according to the USA Dept of Transportation figures cited by the "South Florida Sun-Sentinel." A -$14.2 million loss in the 4th quarter pushed (SPR) into the red, the paper said. Full-year revenue climbed +41% to $761.6 million. Despite increased fuel costs, (SPR) continued with its expansion plans, adding 20 new flights this summer. It operates A319s and A321s on 200 daily flights to 39 destinations.
(SPR) is interviewing and accepting Flight Crew (FC) applications online via its Web site - http://www.spiritair.com. (SPR) predicts it will hire 100 pilots (FC) in 2008.
June 2008: Spirit Airlines (SPR) employees were notified that the low-fare carrier could be headed for hundreds of layoffs in the next 2 months as it struggles with soaring fuel costs, according to a report in "The Miami Herald." Letters went out to union leaders indicating that up to 60% of flight attendants (CA) (448) and 45% of pilots (FC) (242) could be out of work by August 1, as (SPR) closed its New York LaGuardia and San Juan bases, and scaled back its operation in Fort Lauderdale. The letter is required by law under the Worker Adjustment and Retraining Notification Act and by union contracts. "This is just a precaution. There are no specific plans," a SPR) spokesperson said. "(SPR) has made no final decisions about reductions, if any. However, to maintain flexibility, the airline needs to continue to evaluate its overall flying this fall during its lowest demand period of the year, if fuel prices remain at record levels."
(SPR) said its warning to employees regarding possible job cuts was not an indication that it plans to reduce flying. "(SPR) has not made any decisions regarding capacity reductions," (CEO) Ben Baldanza said. "What we have done in order to comply with the (WARN) Act is to notify labor representatives of flight crews (FC) of possible reductions that could be implemented if we continue to see unprecedented fuel price levels." He said (SPR) is evaluating "a variety of capacity scenarios" and "plans to continue growing its operations in the Caribbean and Latin America, and to remain the largest carrier at Fort Lauderdale (FLL)." It recently launched flights from (FLL) to Cartagena (daily), Islip (2x-daily), Columbia (daily, becoming 9x-weekly on June 12), and San Antonio (2x-daily), as well as a daily, Orlando International - Myrtle Beach. It will launch daily, (FLL) - Port of Spain on June 12.
July 2008: Spirit Airlines (SPR) announced a plan to reduce nonfuel expenses by -15% through the retirement of 5 airplanes, schedule adjustments, and layoffs. "We can't sit back and hope for fuel prices to fall. We will attack this challenge by adapting our business to the structural change in fuel prices," (CEO) Ben Baldanza said. "We are in a better position than any other carrier in the Americas to succeed in this environment. By becoming more aggressive than ever on nonfuel costs, raising nonticket revenues and continuing to grow our Latin America network, while trimming lower performing flights, we will win." (SPR), which warned of job cuts last month, said it will retire 5 A319s by September and reduce its workforce "to coincide with these capacity adjustments." It now expects full-year capacity to remain flat year-over-year. It originally planned a +10% increase.
Effective August 1, it will suspend service to Long Island MacArthur (where it promised to return "when market conditions change") and Providenciales. Flights to Grand Cayman and Punta Cana will become seasonal effective September 2, with "additional adjustments" to follow during off-peak periods. It still plans to launch Bogota service on July 24 and has filed an application to serve Manaus. "Other growth opportunities" in the Caribbean and Latin America are under evaluation, it said. The Florida-based carrier currently serves 43 destinations with >200 daily flights.
September 2008: Spirit Airlines (SPR) reported a 2nd-quarter profit of +$17.6 million, a more-than-fivefold increase over the +$3.1 million earned in the same period a year ago, according to the "Miami Herald." Revenue was up +4.6% to $206 million.
(SPR) has approximately 90 pilots (FC) on furlough status.
November 2008: 1st 6 months = 5.51 billion (RPK)s traffic (+4.75%); +5.32% (ASK)s; 79.3% LF (-.4); 3.6 million passengers (+7.75%).
December 2008: Spirit Airlines (SPR) requested authorization from the USA Department of Transportation to operate Fort Lauderdale (FLL) - Armenia, Colombia, service next summer. It already plans to launch daily, (FLL) - Medellin flights on March 1 aboard A319s. The same day it will begin daily, Chicago O'Hare - Myrtle Beach.
January 2009: Spirit Airlines (SPR) will launch daily, Boston - Atlantic City flights May 1. (SPR) will launch 4x-weekly, Fort Lauderdale - Santiago, Dominican Republic, flights on June 18 aboard an A319.
February 2009: Spirit Airlines (SPR) management angered cabin staff (CA) and the Association of Flight Attendants (AFA) - (CWA) with a series of advertisements and proposed in-flight attire that the union called "demeaning." (AFA) International President Patricia Friend said she felt "as though I've entered a time warp," claiming (SPR)'s innuendo-laced advertising campaign is offensive "not just [to] the female population of this country but the male members of humanity who admire and respect women." Aprons adorned with an alcoholic beverage logo also have drawn the union's ire. (AFA) Spirit President, Deborah Crowley said that in addition to "turning flight attendants (CA) into walking billboards," the uniform "diminish[es] the primary and federally mandated role of flight attendants (CA) as safety professionals." The union formally requested that (SPR) management replace the campaigns with "professional and respectful messaging."
March 2009: Spirit Airlines (SPR) will operate seasonal daily Chicago O'Hare - Myrtle Beach service March 1 to November 11. (SPR) launched daily, Fort Lauderdale - Medellin flights aboard an A319. Last year, (SPR) opened two new destinations in Colombia: Bogota and Cartagena. Introductory fares were sold for as little as 16 cents round trip. Next up on (SPR)’s Latin expansion is Santiago in the Dominican Republic. Flights there begin in June.
After wrangling with the USA Department of Transportation (DOT), (SPR) reinstated a "Passenger Usage Fee" of $4.90 each way. (SPR) began charging the fee last summer, along with a $2.50 "natural occurrence interruption fee" and an $8.50 "international service recovery fee." A natural occurrence is more commonly known as "weather." The recovery fee aimed to offset the costs of doing business with international destinations. The (DOT) quickly slapped the fees down and levied a $40,000 fine against (SPR) for misleading advertising: An airline operating in the USA may not advertise fares that do not include fees that are imposed on all passengers. Fuel surcharges are the most common example.
(SPR) does not intend to reinstate the natural occurrence and international service fees. However, it tweaked the presentation of the Passenger Usage Fee on its Web site so that it is included in the "Total departure air fare per passenger including all taxes and fees" amount and is explained in the "Quick note about taxes and fees" that appears in small print below the search results. What the note does not explain is that the fee can be avoided by purchasing the ticket at the airport counter, which is a departure from the way airlines have operated in the era of Internet travel sales. Airlines have sought to encourage customers to book through their Web sites by tacking on fees for call center bookings and airport ticket counter bookings. The fees are justified, they say, because human intervention adds to labor costs. (SPR), however, is waiving the fee for what is probably its most expensive method of distribution. The fact that it also is its least convenient means of distribution for the passenger may be a factor.
(SPR) is not the first airline to try to offset distribution costs through the introduction of fees. Allegiant Air (WJE) assesses a "convenience fee" of $13.50 per passenger for bookings on its Web site. It charges an additional $10.00 per segment for call center bookings. Fees are not charged for airport ticket counter bookings.
Ryanair (RYR), meanwhile, charges a "payment handling fee" of £4.75 or €5 per passenger per one-way flight, whether the booking is made online, through a call center or at the airport.
April 2009: Sensis said Fort Lauderdale-Hollywood International airport now is operating with Sensis Airport Surface Detection Equipment Model X, a runway incursion detection and alerting system. Fifteen of the 35 airports to receive the technology through the (FAA)'s ASDE-X program are operational, Sensis added.
June 2009: FltOps.com, an assistance service for professional pilots (FC), recently released a report of what each major USA carrier pays its captains and first officers. For the eleven largest USA airlines, including freight carriers FedEx (FED) and (UPS), the average annual pay for a first-year first officer flying the smallest mainline airplane is about $36,000. But the range between the best and worst paying airlines is large, with (FED) paying $51,000 and US Airways (AMW)/(USA) just $22,000. Southwest Airlines (SWA) is the second highest paying at the entry level ($50,000), while Continental Airlines (CAL) and United Airlines (UAL) are tied for second last at $27,000. At the other end of the scale are long tenured captains flying the largest airplanes, who earn an average of $165,000 per year. Again, the cargo carriers are tops with (UPS) and (FED) paying $231,000 and $211,000, respectively. The best paying passenger airline is (SWA) ($181,000), quite remarkable considering its pilots (FC) only fly narrow body 737s. The worst is JetBlue (JBL) ($123,000). Flt.Ops.com notes that pilots (FC) can earn considerably more than their base pay through international overrides, overtime work, per diems and other items.
Recently released federal government employment figures for airline pilots (FC) and mechanics (MT) run counter to data compiled by private organizations and the personal stories of highly-trained pilots (FC) standing in unemployment lines. FltOps.com recently held a pilot (FC) recruiting conference in Dallas-Fort Worth in which only a handful of airlines were on hand to interview pilots (FC). Last year’s event drew 35 airlines, spelling out how drastic the drop in pilot (FC) hiring has been, as air carriers quit hiring and in many case furlough pilots (FC). FltOps.com says the 15 largest USA airlines it tracks hired 2,300 pilots (FC) in 2006 and 2,440 in 2007. But last year, only 1,300 pilots (FC) found jobs. Through the first four months of 2009, only 28 new pilots (FC) joined the 15 air carriers. FltOps.com’s figures jive with that of AIR Inc, the aviation career information service, that for two decades served as a reservoir of data on pilot (FC) hirings. But if anyone needed more evidence of the worsening condition of the airline industry, Air Inc in February this year, shuttered its operation as a result of the sorry state of the economy worldwide, which has produced a dearth of new commercial pilot (FC) jobs as legacy airlines shed capacity, implementing pilot (FC) furloughs and layoffs while also putting off new flight deck crew (FC) hiring.
By the end of 2008, as the recession deepened, it became clear that the future would be bleak for newly minted flight school graduates. Air Inc said airline pilot (FC) hiring totals for 2008 were less than half of what they were the previous year, 6,479 compared to 13,157 in 2007.
However, the federal government says USA scheduled passenger airlines employed +2.3% more pilots (FC) and +5.9% more maintenance (MT) workers in 2008 than in 2007, while total industry jobs declined by -3.0%. According to the USA Department of Transportation (DOT)’s Bureau of Transportation Statistics (BTS), the seven large network carriers employed +1.1% more pilots (FC) and +8.6% more maintenance (MT) workers in 2008 than in 2007. The seven largest low-cost carriers (LCC)s employed +5.2% more pilots (FC) and -6.8% fewer maintenance (MT) workers from 2007 to 2008.
Delta Air Lines (DAL) had the largest increase in pilots (FC) of any network airline from 2007 to 2008,K while Alaska Airlines (ASA) had the greatest percentage decrease in pilot (FC) employment of the network airlines. United Airlines (UAL) had the largest increase in maintenance workers of any network airline from 2007 to 2008, while Northwest Airlines (NWA) had the smallest increase.
All of the low-cost carriers (LCC)s except Frontier Airlines (FRO) added pilots (FC) from 2007 to 2008. Spirit Airlines (SPR) had the largest increase in pilot (FC) employment followed by Allegiant Airlines (WJE). (WJE) had the largest increase in maintenance (MT) workers of any low-cost airline from 2007 to 2008, while (SPR) had the largest reduction. The seven network carriers employed 13.2 pilots per airplane in 2008, down from 13.5 pilots (FC) per airplane in 2007. The (LCC)s employed 11.2 pilots (FC) per airplane in 2008, down -1.8% from 11.4 pilots (FC) per airplane in 2007.
Alaska Airlines (ASA) had 12.0 pilots (FC) per airplane in 2008, down from 12.9 (FC) per airplane in 2007, the fewest of any network airline. Delta (DAL), with 14.9 per airplane, up from 14.3 per airplane in 2008, had the largest increase in the number of pilots (FC) per airplane from 2007 to 2008 and had the most pilots (FC) per airplane of any network carrier.
Allegiant (WJE) had 9.3 pilots (FC) per airplane in 2008, the fewest of any (LCC), compared to 9.6 pilots (FC) per airplane in 2007. Spirit (SPR), with 15.5 (FC) per airplane, up from 12.6 (FC) per airplane in 2007 had the most pilots (FC) per airplane in the (LCC)s group.
As regards airline mechanics (MT), the (BTS) said the passenger airlines had 8.9 maintenance (MT) workers per airplane in 2008, up from 8.3 per airplane in 2007. The network airlines had 12.9 maintenance (MT) workers per airplane in 2008, up from 12.3 (MT) per airplane in 2007. Spending by network airlines for outsourced maintenance increased from 42.5% of total maintenance spending in 2007 to 42.8% in 2008. The (LCC)s had 3.2 maintenance (MT) workers per airplane in 2008, down from 3.7 (MT) per airplane in 2007. Spending by (LCC)s for outsourced maintenance increased from 52.1% of total maintenance spending in 2007 to 54.6% in 2007.
(NWA) had 0.8 maintenance (MT) workers per airplane in 2008, the fewest of any network airline and unchanged from the 0.8 employees per airplane in 2007. (NWA)’s spending for outsourcing maintenance declined from 71.0% of total spending in 2007 to 65.9% in 2008. American Airlines (AAL) had 22.4 maintenance (MT) workers per airplane in 2008, the most of any network airline. (AAL)’s spending for outsourcing was 23.6% of total maintenance spending in 2008, the lowest percentage spending share of the network carriers.
Virgin America (VUS) had 1.7 maintenance (MT) workers per airplane in 2008 the fewest of any (LCC). Of the (LCC)s, Spirit (SPR) spent the smallest portion of its maintenance expense on outsourcing at 22.6%. Southwest (SWA) had the highest percentage share for outsourcing at 61.3%. Frontier (FRO) had 3.9 maintenance (MT) workers per airplane in 2008, the most of any (LCC) but down from 7.7 (MT) employees per airplane in 2007. (FRO)’s spending for outsourcing increased from 20.5% of total maintenance spending in 2007 to 24.9% in 2008.
In the news, Alaska Airlines (ASA) and its mechanics (MT) union produced a tentative agreement on a two-year contract extension, through October 17, 2011. The Aircraft Mechanics Fraternal Association (AMFA) represents 655 airline technicians (MT). (ASA) and the union announced that they expect the results of the ratification vote by late July. (AMFA) is the largest craft union representing airplane maintenance technicians (MT) and related employees and serves members at (ASA), Mesaba Airlines and (SWA).
But (SWA) pilots (FC) rejected a tentative five-year contract that would have increased their salaries and retirement benefits. Work to reopen contract talks with (SWA) will begin immediately, said Carl Kuwitzky, President of the (SWA) Pilots’ Association. Almost 51% of pilots (FC) voted against the agreement, which was reached in January after >2 years of talks. In the interim, the existing contract remains in effect. >95% of pilots (FC) voted. "We are naturally disappointed and acknowledge it was a very close vote," said Chuck Magill, VP Flight Operations for (SWA). "We reached a tentative agreement in good faith, and both sides put a lot of effort into getting to this point. We have an outstanding and highly productive group of Pilots (FC), and we appreciate their active involvement in the voting process. We welcome the opportunity for our negotiating teams to re-engage and work toward an agreement that best meets the needs of our company and our outstanding pilots during these challenging economic times."
Meanwhile, it is reported that the skies aren’t so friendly for Steffan Schmidt and Chris Campbell. They were recently found on a street in Seattle, at rush hour, holding signs more often used by panhandlers. “Two laid-off pilots (FC)” read Schmidt's sign. “Will Fly for Food” Campbell’s sign said. It’s a small industry, and there aren’t a lot of pilot (FC) gigs on Craigslist or Monster, said Campbell, who lost his job flying a corporate airplane. Schmidt was laid off from his job flying a corporate plane three months ago, and figured they would get some “exposure” by standing at a busy freeway ramp. “The normal way to find employment didn’t cut it,” he said. Schmidt said he wanted to get off unemployment, and not “waste any more tax dollars.” They're seeking pilot (FC) jobs, not handouts, but passersby offered them money and books, which they politely declined.
July 2009: Spirit Airlines (SPR) launched thrice-weekly, Fort Lauderdale - Santiago, Dominican Republic, service and will increase it to daily on September 1. (SPR) will launch twice-weekly, Fort Lauderdale - Armenia, Colombia, service November 13.
Air Jamaica (JAM)'s rumored sale to Spirit Airlines (SPR) owners Indigo Partners and Oaktree Capital has not been finalized, airline and government officials told "The Jamaica Observer." "We are still talking to interested parties and the matter has not yet gone to Cabinet," a (JAM) board member told the paper, while a government official said, "There has been no sale as yet. The recommendation still has to go to the Cabinet and the board of Air Jamaica (JAM) before a decision is taken."
September 2009: Spirit Airlines (SPR) was assessed a record $375,000 civil penalty by the USA Department of Transportation (DOT) "for failing to comply with rules governing denied boarding compensation, fare advertising, baggage liability and other consumer protection requirements," the agency said.
The (DOT) said its Aviation Enforcement Office (AEO) found that (SPR) bumped passengers from oversold flights without compensation or written notification that they were entitled to compensation, and that (SPR) "failed to resolve baggage claims within a reasonable period." The (DOT) said (SPR) furnished compensation for delayed luggage for only the outbound leg of roundtrip flights and only for purchases made more than 24 hours after arrival. It also failed to accept responsibility for "missing laptop computers and certain other items it accepted as baggage," the (DOT) said.
In addition, (SPR) omitted carrier-imposed fees from the base fare quoted in certain advertisements and was found guilty of several other violations regarding response and handling of passengers' questions or complaints.
The (DOT) said the (AEO)'s investigation involved both a review of complaints filed with the department and inspections of airports and (SPR)'s headquarters. It said it intends to conduct a follow-up investigation within the next year.
October 2009: Spirit Airlines (SPR) has 78 pilots (FC) on furlough. (SPR) plans to recall 6 pilots (FC) effective December 1, 2009.
November 2009: Spirit Airlines (SPR) launched twice-weekly, Fort Lauderdale - Armenia, Colombia service.
December 2009: Next spring Spirit Airlines (SPR) will start Atlanta to Myrtle Beach, using A319s. Myrtle Beach is a popular golfing destination, and (SPR) is already its busiest carrier.
(SPR) named WestJet (WJI) Executive VP Operations, Ken McKenzie as its Chief Operations Officer (COO) and former Skybus Airlines (SKS) VP Operations, Chris Grazel as VP Flight Operations.
February 2010: Spirit Airlines (SPR) unveiled a feature on its website allowing potential customers to see how much of a given fare is comprised of fuel costs. "When a fare is $137 and fuel makes up $78 of that fare, customers can decide if the remaining $59 makes this a good time to buy," it said. (SPR) provides a chart showing how much fuel is used per passenger for A319 trips of various lengths with an 80% LF load factor. It also shows the current price of fuel and a per-passenger, per-trip fuel cost. "Everyone sees the effect of oil price movements when they fill up their car, but rarely do customers have any idea how much of their fare is comprised of fuel cost," CMO, Barry Biffle said. "With this new approach, our customers will see exactly what they are paying for in fuel rather than guessing."
March 2010: Spirit Airlines (SPR) will operate daily, Atlantic City - Detroit service May 20 to November 10.
April 2010: Two of the airline industry's ancillary revenue pioneers are attempting to see how far the fee-for-service concept can be pushed, with Spirit Airlines (SPR) announcing that it will charge passengers up to $45 for carry-on bags and Ryanair (RYR) revealing that it is continuing to pursue its pay-per-use toilet idea.
Spirit (SPR), which was the first USA carrier to impose checked baggage fees, said that it will begin charging passengers for bags that are stowed in overhead bins. The fee will be $30 if paid in advance online and $45 if paid at the airport, with frequent-flier members charged $20. It will apply for flights booked going forward for travel starting August 1.
(SPR) said the fees will allow it to keep fares low, acknowledging that a cabin baggage charge is an "unprecedented move." Personal items that can fit under seats, such as laptop computer bags and purses, will remain free. Other items, such as umbrellas, "reading material for flight," diaper bags and "food for immediate consumption" also will be free, it said.
Its checked baggage fees will remain $15 for a first bag and $25 for a second on domestic flights and $20 and $30 on international flights/ All checked bag fees must be paid in advance.
COO, Ken McKenzie said the new fees will reduce "fares even further . . . [and] reduce the number of carry-on bags, which will improve in-flight safety and efficiency by speeding up the boarding and deplaning process." He added, "Bring less, pay less. It's simple."
A320-232 (4264, N602NK), delivery.
May 2010: Spirit Airlines (SPR) will operate seasonal daily, Detroit - Atlantic City service through November 10. (SPR) plans to launch thrice-weekly, Fort Lauderdale - Barranquilla service on July 29.
(SPR) represented by the Air Line Pilots Association (ALPA) rejected the USA National Mediation' Board (NMB)'s proposal for arbitration and asked the (NMB) to allow a 30-day countdown to a possible strike to start. Sean Creed, head of the Spirit (SPR) unit of (ALPA), said: "This company has shown time and time again that it doesn't feel the need to bargain with us in good faith. We hope that the added pressure of a strike deadline will help management realize that a fair and equitable contract is in everyone's best interest." (SPR) and its pilots (FC) have been in contract negotiations for more than three years to no avail.
A320-214 (4321, N603NK), AerVenture leased.
June 2010: Spirit Airlines (SPR) carried approximately 6.1 million passengers last year, down -10.7% compared to the prior year, according to data filed with the USA Department of Transportation. (SPR) generated revenue of $699 million with an operating profit of +$107.2 million and a net profit of +$81.5 million.
(SPR) suspended operations through June 15 as its pilots (FC) walked off the job at the expiration of the federally mandated 30-day cooling-off period at midnight, June 11 - 12.
(SPR) previously had said it "developed plans to continue operations" should its Air Line Pilots Association (ALPA)-represented pilots (FC) go on strike. In a statement, (SPR) said it "offered over >30% pay increases totaling $70 million over five years, net of productivity improvements," as well as a $3,000 signing bonus. The pilots (FC) would also receive an 8% 401-K match in years one through three with an increase to +9% in year four, while all other (SPR) employees only receive a 3% match." (SPR) also said its pilots (FC) "would have retained a four-day-off break between each and every trip, a feature not found in any other (ALPA) contract."
“We are frustrated and disappointed that our pilots (FC) have turned down an over >30% increase at a cost of over $70 million over five years, while disrupting thousands of our customers and jeopardizing the livelihoods of our over >2,000 employees,” said (SPR) President & CEO, Ben Baldanza.
“No one wanted this strike — certainly not this pilot (FC) group,” said Sean Creed, (SPR) pilot (FC) group Chairman. “We have sacrificed so much to see this company prosper. Now we are sacrificing our paychecks until we get a contract that reflects our contributions to this airline.”
(SPR) which has canceled flights through at least June 16, is not saying much about what it is doing for its customers. (SPR)'s plan to wet-lease airplanes and crews (FC) - (CA) to provide services during the strike seems to have fallen through, with carriers apparently reluctant to be seen as helping to break a pilots (FC)’s union.
Louis Smith, President of the aviation career specialist site http://www.FltOps.com, says he believes the wet-lease option has fallen through because the Internet makes it almost impossible for pilots (FC), who cross a picket line, to keep their names from being spread worldwide as strike-breakers. That’s evident in the banter on all of the “underground” message boards for pilots (FC) online, he says.
“Everyone is saying ‘don’t cross, don’t cross, because it will ruin your career,’” Smith says. As a consequence, he says, pilots (FC) at any airline that might consider wet-leasing to Spirit (SPR) are telling their bosses “if you put us in this economic warfare, we’re not playing."
FlyersRights.org, the nation's foremost airline passenger advocacy group, called upon Spirit Airlines (SPR) CEO, Ben Baldanza to keep his promise to secure safe passage for passengers stranded by (SPR)'s ongoing pilot (FC) strike. On June 9th, just before (SPR) pilots (FC) walked off the job, (SPR) spokeswoman, Missy Pinson told "The Associated Press" that (SPR) was "partnering with other air carrier providers to continue to serve our customers" and would provide a $100 voucher in addition to free passage home. So far, these claims have proven to be false.
"Despite its claims and promises, (SPR) appears to have no intention to care for its customers in light of the strike and has no plan in place to address stranded passengers across the globe - - who are now forced to fend for themselves," said FlyersRights.org Executive Director, Kate Hanni. "Tickets issued by (SPR) are without value on other airlines and (SPR) is depriving passengers of information on how they will care for them thereby perpetrating a global fraud upon its customers."
Although Baldanza promised to reroute passengers on other carriers and to refund passengers' money, FlyersRights.org is receiving hotline calls telling a very different story. One mother called to say that her daughter and a friend are stranded in Aruba. The family was assured before the trip that (SPR) would not strand the girls, but they have now told them to buy their own tickets, and they will be reimbursed later. Or, they can come back in a week for a booking on (SPR). The girls' credit cards and cell phones do not work in Aruba, and they have no cash even for food. (SPR) officials in Aruba confirmed that (SPR) has no agreements with any other airline.
FlyersRights.org Executive Director, Kate Hanni also noted that she and her entire membership would be calling upon the Congress, the Secretary of Transportation and the Justice Department to investigate (SPR) as a result of its apparent fraud upon the flying public. FlyersRights.org has also published information for stranded passengers to use.
In response to the crisis, FlyersRights.org recommends the following to stranded (SPR) passengers:
1. If you have not received a refund and the promised $100.00 voucher, call your credit card immediately and challenge the charge.
2. File a claim in small claims court for all expenses related to being stranded and/or pre-pays for trips not taken.
3. File a complaint with the Department of Transport (DOT), who can assist you with remedies.
4. Do NOT fly Spirit Airlines (SPR). Low cost air carriers, in general, will do NOTHING for you in the event of any irregular operation, even their own operations.
5. If you are stranded by (SPR) please contact FlyersRights.org via our website.
CONTACT: Kate Hanni of FlyersRights.org, +1-707-337-0328
Web Site: http://www.flyersrights.org/
Following a six-day strike, (SPR) reached a tentative agreement on a new labor contract with its pilots (FC), who agreed to return to work.
Spirit (SPR) said the accord, reached with the help of the USA National Mediation Board, is "fair and equitable" and will "ensure the long-term stability of the company, and allow Spirit (SPR) to continue offering its customers ultra-low fares."
(SPR) CEO, Ben Baldanza said, "We apologize to those of our customers whose travel was disrupted as a result of the strike and look forward to earning back their trust with ultra-low fares, great service, and the best pilots (FC) in the sky."
July 2010: Spirit Airlines (SPR) will launch daily, Chicago O'Hare service to Las Vegas on November 11 and to Atlantic City on March 3. (SPR) launched thrice-weekly, Fort Lauderdale - Barranquilla (Colombia) service.
The USA (FAA) proposed a fine against Spirit Airlines (SPR) of $50,000 for "alleged violation of the Federal Aviation Regulations or Department of Transportation Hazardous Materials Regulations," the (FAA) said. Spirit (SPR) was reprimanded for failing to replace a faulty elevator aileron computer (ELAC) after an A321 experienced an un-commanded pitch-down on August 21, 2009. (SPR) operated the airplane on a San Juan - Fort Lauderdale passenger flight the next day "although (SPR)’s maintenance program required replacement of the (ELAC) computer," the (FAA) said, noting the airplane experienced another un-commanded pitch-down.
September 2010: Spirit Airlines (SPR) had a net loss of -$2.8 million in the first half of 2010, compared to net income of +$41.5 million in the year-ago period.
The information is contained in (SPR)'s Registration Statement for an initial public offering (IPO) of common stock filed with the USA Securities & Exchange Commission.
Results for the January - June period of 2010 were negatively impacted by the five-day pilot (FC) strike in June, which (SPR) estimated reduced operating income by -$19 million. Revenues for the half-year totaled $357.4 million, up +2%. Operating profit declined -66% to +$22 million from +$65.4 million in the 2009 period.
(SPR) expects to raise $300 million from the (IPO), half of which will be retained by (SPR) with the remainder used to retire debt and preferred stock, much of it belonging to former majority owner Oaktree Capital Management and current controlling shareholder Indigo Partners. Indigo is led by Bill Franke, the former Chairman of America West (AMW) and current Chairman of (SPR).
Based on the information contained in the filing, (SPR) has enjoyed financial success since repositioning itself as an "ultra low cost carrier" with a focus on the Caribbean and Latin American regions beginning in the middle of the decade. Annual revenues rose +44% from $484.4 million in 2005 to $700 million last year.
After posting losses of -$76 million and -$80.7 million in 2005 and 2006, respectively, it turned the corner on profitability, earning +$1.4 million in 2007 and +$33.3 million in 2008 - - a year in which few other USA airlines were in the black. Earnings totaled +$83.7 million in 2009, representing a net after-tax margin of 12%. Operating profit was $111.4 million, a 15.9% margin.
(SPR) attributes its success to an "ultra low-cost structure," with cost per (ASM) excluding fuel and exceptional items of 5.45 cents last year, down from 6.66 cents in 2005. (SPR) has boosted airplane utilization from 8.9 hours per day to 13 hours per day over the same period as the network has grown from 19 airports to 43. Although average ticket revenue per passenger flight segment fell from $98.78 to $84.77 over the five years, ancillary revenue per passenger segment soared from $3.38 to $25.91, and average yield from 10.76 cents to 11.81. It currently operates 26 A319s, three A320s and two A321s and will add 37 A320 family airplanes to its fleet through 2015.
A320-232 (4431, N604NK), AerVenture leased.
October 2010: Spirit Airlines (SPR) will launch service to five new cities and add 11 nonstop routes next year. New destinations are Plattsburgh, and Niagara Falls, New York; Latrobe (LBE), Pennsylvania; Charleston, West Virginia; and Dallas/Fort Worth (DFW).
Plattsburgh will be served four-times weekly from Fort Lauderdale (FLL) beginning January 14 and four-times weekly from Myrtle Beach (MYR) on a seasonal basis from May 5. Niagara Falls – (FLL) service will be thrice weekly from January 27 and thrice weekly on a seasonal basis from (MYR) on May 5. Fort Lauderdale – (LBE) service commences February 12 on a twice-weekly basis, rising to four-times weekly from Feb. 17. Latrobe also will be served on a four-times-weekly seasonal basis from (MYR) from May 5. Charleston (CRW) - (FLL) service starts March 3 on a thrice-weekly basis. Seasonal service from (MYR) to CRW begins May 5 on a thrice-weekly basis. (SPR) will operate twice-daily, (FLL) – (DFW) service beginning May 5. (SPR) also launches daily seasonal service from (MYR) to Washington National May 5.
November 2010: Spirit Airlines (SPR) will launch Fort Lauderdale service to Plattsburg, New York (four-times-weekly, January 14), Niagara Falls, New York (thrice-weekly, January 27), Latrobe, Pennsylvania (four-times-weekly, February 12), Charleston, West Virginia (thrice-weekly, March 3), and Dallas Fort Worth (twice-daily, May 5). From Myrtle Beach, it will launch service to Washington Reagan (daily, May 5), Plattsburgh (four-times-weekly, May 5), Niagara Falls (thrice-weekly, May 5), Latrobe (four-times-weekly, May 5), and Charleston (thrice-weekly, May 5).
January 2011: America’s Bureau of Transportation Statistics (BTS) released figures showing Spirit Airline (SPR)’s third quarter net profit was +$64 million, or +$10 million excluding one-time tax gains.
(SPR) will start flights to Plattsburg near Montreal and Niagara Falls near Buffalo and Toronto later this month. (SPR) will launch daily, Chicago O'Hare - Los Angeles service on May 1. (SPR) launched four-times-weekly, Plattsburgh - Fort Lauderdale service (becoming six-times-weekly March 3 - April 25, and five-times-weekly, April 26 - May 4), and will launch four-times-weekly, Plattsburg service to Myrtle Beach on May 5. (SPR) launched thrice-weekly, Ft Lauderdale - Niagara Falls service. It will begin thrice-weekly, Niagara Falls - Myrtle Beach service on May 5, and thrice-weekly, Ft Lauderdale - San Salvador service June 13, subject to foreign government approval.
February 2011: Spirit Airlines (SPR) resumed seasonal thrice-weekly, Fort Lauderdale - Punta Cana service.
(SPR) is interviewing and hiring pilots (FC). (SPR) is currently evaluating its needs for 2011 and hiring should be posted soon. (SPR) recently took delivery of a new A320 with another to be delivered by the end of the year.
March 2011: Spirit Airlines (SPR) launched five-times-weekly, Chicago O'Hare - Atlantic City service, which will become daily on April 1. (SPR) will launch five-times-daily, Los Angeles - Las Vegas service on May 5. Additionally, it will launch twice-weekly, Fort Lauderdale - Toluca service on June 3, subject to Mexican government approval. (SPR) launched thrice-weekly, Fort Lauderdale - Charleston (CRW), West Virginia service. (SPR) will also operate seasonal thrice-weekly, (CRW) - Myrtle Beach service starting May 5.
June 2011: Spirit Airlines (SPR) will begin twice-daily, San Diego - Las Vegas service on September 7, increasing to thrice-daily, September 22. (SPR) will also increase daily Portland, Oregon - Las Vegas service to twice-daily on September 22. (SPR) will launch service from Chicago O’Hare to Boston (daily; twice-daily seasonally), Dallas/Fort Worth (twice-daily; thrice-daily seasonally), Detroit (twice-daily) and New York LaGuardia (twice-daily) on August 18, and to Orlando (daily) on November 10.
(SPR) named Tony Lefebvre Senior VP & COO, effective immediately. Lefebvre, who previously served as Senior VP Airports, Customer Service & In-flight, replaces Kevin McKenzie, who is joining Airbus (EDS) North America as Senior VP Customer Services, effective September 1.
(SPR) which has led the USA airline industry in charging passengers fees for anything other than their low base airfares, has added another to its stable. Beginning November 1, Spirit (SPR) said it will institute a new $5 charge for passengers asking agents to print their boarding pass at the airport. Passengers who check in on-line or at an airport kiosk will not be charged the $5 fee, although next summer, even those checking in at kiosks will be charged $1.
At the same time, (SPR) said it will be lowering fares on all non-stop flights by $5 each way for travel on or after November 1.
August 2011: Spirit Airlines (SPR) launched Chicago O'Hare service to Boston (daily), Dallas Fort Worth (twice-daily), Detroit (twice-daily) New York LaGuardia (daily), and will add service to Orlando on November 10th.
September 2011: Spirit Airlines (SPR) launched 2X-daily, Portland, (Oregon) - Las Vegas service.
October 2011: Spirit Airlines (SPR) third-quarter net income fell -55.2% from the prior-year period to +$27.7 million, owing to Hurricane Irene, a +65.2% year-over-year increase in fuel expenses, and a +38.9% increase in maintenance and repair costs.
Despite the drop in net income, (SPR) President & CEO, Ben Baldanza still characterized the third-quarter results as “strong,” with a +41.8% year-over-year increase in revenues to $288.71 million, and a +112.4% leap in operating income to $44.56 million.
“Forward bookings remain strong, as we have seen all year,” Baldanza said. “As a result of the continued demand strength, we raised fares +$5 last week, system-wide.”
The introduction of a carry-on bag fee last August drove a +30.4% increase in average non-ticket revenue per passenger flight segment (PFS) to $44.66. Non-ticket revenue increased +56% to $102 million for the quarter.
(SPR) passenger traffic grew +15.6% to 2.11 billion (RPM)s on a +10.4% increase in capacity to 2.42 billion (ASM)s. Load factor rose +3.8 points to 87% LF. (SPR) expects fourth-quarter capacity to be up +5.6% year-over-year.
November 2011: The USA Department of Transportation (DOT) has fined Spirit Airlines (SPR) $50,000 for advertising fares that did not include or disclose details on taxes and fees.
According to a (DOT) statement, Spirit (SPR) used billboards and hand-held posters in June to advertise new service from Los Angeles that contained an *asterisk next to the advertised fare. On the billboards, the *asterisk led to small print which stated that additional taxes, fees and conditions would apply, but did not disclose the amount of those taxes and fees. The posters did not include any information about the taxes and fees or their amounts, the (DOT) said.
In addition, the (DOT) said, Spirit (SPR) sent Twitter feeds announcing $9 each-way fares. Consumers clicking on the link that was provided were taken to a page on (SPR)’s website where it was revealed that these fares did not include all taxes and fees, and that they were subject to a roundtrip purchase requirement.
Only after clicking on a second link, which took readers to the bottom of the page, was the amount of additional taxes and fees disclosed, the (DOT) said.
Spirit (SPR)told the (DOT) that it is "committed to complying in full" with the advertising policies and its "omissions in this case were inadvertent." (SPR) said the campaigns in question were brief and of limited scope, and were discontinued when the (DOT) expressed its concern.
“Consumers have a right to know the full price they will be paying when they buy an airline ticket,” Transportation Secretary, Ray LaHood said. “We expect airlines to treat their passengers fairly, and we will take enforcement action when they violate our price advertising rules.”
(DOT) rules require any advertising that includes a price for air transportation to state the full price to be paid by the consumer, including all carrier-imposed surcharges. The only exceptions currently allowed are government-imposed taxes and fees that are assessed on a per-passenger basis, such as passenger facility charges, which may be stated separately from the advertised fare but must be clearly disclosed in the advertisement.
Under the (DOT)’s recently adopted consumer rule, carriers will be required, among other things, to include all government taxes and fees in every advertised fare beginning January 24.
Spirit Airlines (SPR) will open a crew base at Las Vegas McCarran International Airport on February 1. It will also add a maintenance base at the airport in February.
Spirit Airlines (SPR) and Airbus (EDS) signed a Memorandum of Understanding (MOU) at the Dubai Airshow for 75 A320 airplanes, comprising 45 A320neos and 30 A320s. The new airplanes will be used on (SPR)’s growth markets in the USA, the Caribbean and Latin America. SEE PHOTO - - "SPR-A320NEOS - 2011-11."
December 2011: On the same day that American Airlines (AAL) filed for bankruptcy, Spirit Airlines (SPR) announced four new routes from Dallas Fort Worth to Atlanta, Boston, Chicago O'Hare, Las Vegas and New York La Guardia. (SPR) continued with adding flights from its Fort Lauderdale base along with the Dallas (DFW) and Chicago (ORD) service. (SPR)'s target in gong to Las Vegas is however, Southwest Airlines (SWA).
(SPR) will launch Phoenix Mesa service to Las Vegas (2X-daily, February 9), Dallas Fort Worth (daily, March 22), and Ft Lauderdale (daily, March 22).
January 2012: Spirit Airlines (SPR) is actively hiring Flight Crew (FC) pilots. (SPR) expects delivery of 7 more A320s in 2012. Applicants can apply online. (SPR) announced plans to open a Flight Crew (FC) and maintenance (MT) base in Las Vegas beginning in February, 2012. See FltOps.com and FAPA.aero.
February 2012: Spirit Airlines (SPR) launched four new routes with its 145-seat A319s on 9 February. (SPR) expanded out of Dallas/Fort Worth (DFW) with three routes; each daily flights to Atlanta (ATL), New York LaGuardia (LGA) and Orlando (MCO). Competition to Atlanta comes from Delta (DAL)'s 74 and American Airlines (AAL)’s 62 weekly flights, while (AAL) competes on the LaGuardia and Orlando routes with 98 and 70 weekly flights, respectively. “We welcome the addition of new (SPR) service from (DFW) to Atlanta, Orlando and New York City, and we are pleased to see even more flights coming later this spring,” said Jeff Fegan, (CEO) of (DFW) International Airport. “(SPR)’s tremendous expansion at our Airport means that our passengers will benefit from having more travel options and more choices to fly.” The same day, (SPR) also added a new airport to its network when it launched twice-daily flights from its Las Vegas (LAS) base to Phoenix-Mesa (AZA). This makes (SPR) the second airline customer at Phoenix-Mesa after Allegiant Air (WJE), which also competes on the new route with its 12 weekly flights. “We are excited to welcome (SPR)’s first flight from Las Vegas to Mesa,” City of Mesa Mayor Scott Smith said. “Each new airline and each new destination shows that Phoenix-Mesa Gateway Airport is excelling in the midst of and in spite of the struggling economy.”
(SPR) will launch daily, Latrobe - Orlando service on May 17. (SPR) launched service from Dallas Fort Worth (DFW) International Airport to Atlanta, Orlando International Airport and New York LaGuardia. In May it will launch (DFW) service to Tampa (May 4) and Myrtle Beach (May 3) and has applied for government approval for service to Toluca, Mexico. (SPR) launched 2X-daily Las Vegas - Phoenix Mesa service. (SPR) will launch Denver service to Chicago O'Hare (daily), Dallas Ft Worth (daily, to 2X-daily May 17), Ft Lauderdale (daily), and Las Vegas (2X-daily) on May 3. (SPR) will launch daily, Atlantic City - Atlanta - Dallas service on May 17. It will resume seasonal daily, Atlantic City - Boston service on March 1 and seasonal Atlantic City service to Detroit and Chicago O'Hare on May 3. It will also launch 3X-weekly, Myrtle Beach - Dallas service on May 3.
(SPR) on February 7 opened its new flight crew (FC) and maintenance base at Las Vegas McCarran International Airport.
A320-232 (5029, N612NK), delivery.
March 2012: Spirit Airlines (SPR) resumed daily seasonal, Ft Lauderdale - Las Vegas service and daily seasonal, Atlantic City - Boston service. It will also launch Minneapolis service to Chicago O'Hare (3X-daily) and Las Vegas (daily) on May 31.
Pinnacle Airlines Corporation Senior VP & (CFO), Ted Christie will move to Spirit Airlines (SPR), where he will hold the same positions, effective April 1.
Christie will succeed David Lancelot, whom Spirit (SPR) said will leave to explore new opportunities.
Low-cost carrier (LCC), Spirit launched an Initial Public Offering (IPO) last year.
April 2012: Spirit Airlines (SPR) will launch daily, Dallas Fort Worth service to Toluca, Detroit, and San Diego on June 21. (SPR) will increase 2X-weekly, Myrtle Beach - Plattsburgh, New York service to 3X-weekly June 14 - Septembher 1. It will also increase 2X-weekly, Myrtle Beach - Niagara Falls, New York service to 3X-weekly, June 21 - September 4. It will cancel all flights between Niagara Falls and Myrtle Beach, South Carolina from May 15 - June 20 and flights between Niagara Falls and Fort Lauderdale, Florida from May 15 - June 30 due to runway construction at Niagara Falls.
May 2012: Spirit Airlines (SPR) reported first-quarter net income of +$23.4 million, almost tripled from a net profit of +$7.9 million in the year-ago period.
(SPR) President & (CEO), Ben Baldanza credited (SPR)’s network expansion as the reason for the result. “Robust demand for our ultra-low base fares with a range of optional services for a fee resulted in our revenue growth outpacing our capacity growth,” Baldanza said.
Revenue was up +29.6% to $301.5 million, while expenses increased +28.4% to $264.3 million, producing an operating profit of +$37.2 million, up +38.7% from +$26.8 million in the year-ago quarter. (SPR) said the operating performance was “primarily due to increased flight volumes and higher fuel expense,” which increased +$27.8 million during the quarter.
Traffic rose +18.8% to 2.2 billion (RPM)s on a +17.7% increase in capacity to 2.6 billion (ASM)s, producing a load factor of 84.8% LF, up +0.8 point. Yield increased +9.1% to 13.74 cents as (RASM) rose +10.1% to 11.65 cents and (CASM) increased +9.2% to 10.21 cents. (CASM) ex-fuel was 5.99 cents, up +5.6%.
(SPR) launched daily, Latrobe (near Pittsburgh) - Orlando service on May 17 as well as from Atlanta to Atlantic City. (SPR) launched Denver service to Chicago O'Hare (daily), Dallas Fort Worth (2X-daily), Fort Lauderdale (daily) and Las Vegas (2X-daily).
June 2012: Spirit Airlines (SPR) launched daily Dallas service to Toluca Mexico City, Detroit, San Diego and Portland (Oregon) on June 21.
(SPR) has wet-leased a 737-4Q8 for the summer season. The wet-leased airplane has now been identified as Xtra Airways (CIN) 737-4Q8 (25105, N772AS). It currently operates on two of (SPR)'s four daily services between Fort Lauderdale Hollywood International (FLL) and New York La Guardia (LGA) airports.
July 2012: Spirit Airlines (SPR) more than doubled a +$16.9 million net profit in the 2011 June quarter with +$34.6 million in net income for this year’s second quarter.
The fast-growing airline increased second-quarter revenue by +25.5% to $346.3 million, while expenses rose +20.9% to $291.2 million, producing an operating profit of +$55.1 million, up +57.7% year-over-year. Quarterly traffic heightened +16.8% to 4.59 billion (RPM)s on a +17.1% lift in capacity to 5.42 billion (ASM)s, producing a load factor of 84.8% LF, down -0.2 point.
(SPR)’s average yield in the second quarter was up +9% compared to the prior-year period to 14.11 cents. Revenue per passenger flight segment increased by +4.3% to $130.54, comprised of $78.97 in base ticket revenue (down -3.9%) and $51.57 in ancillary revenue (up +19.8%). “(SPR) has continued its strategy to offer low base fares while increasing revenue from non-ticket sources,” (SPR) said.
Second-quarter (CASM) rose +6.2% to 10.26 cents; (CASM) ex-fuel grew +8.7% to 6.02 cents.
(SPR) took delivery of two A320s during the three months ended June 30, ending the half-year with 42 airplanes. It expects to take delivery of two more A320s in the second half.
(SPR) will operate daily, Phoenix - Chicago O’Hare (ORD) service, Fort Myers service to Boston (daily), Dallas (3X-weekly) and Minneapolis (MSP) (daily), daily Tampa - (ORD), and daily, (MSP) - Fort Lauderdale service, November 8 - April 24. (SPR) will launch Baltimore service to Fort Lauderdale (2X-daily), and Dallas (daily) on September 6. (SPR) will launch 2X-daily, Houston - Dallas service on September 20.
August 2012: Spirit Airlines (SPR) will launch daily, Los Cabos - San Diego - Dallas (DFW) service on November 8, increasing to 4X-weekly on June 13, 2013. (SPR) will also launch 3X-weekly, Cancun - (DFW) service April 25, increasing to daily June 13, 2013.
(CTS) Engines won a multi-year engine maintenance service agreement with Spirit Airlines (SPR). Under the terms of the (SPR) agreement, (CTS) will provide all on-wing engine field service work for (SPR)’s fleet of 42 (V2500)-powered A320 family airplanes.
September 2012: Spirit Airlines (SPR) launched Baltimore service to Fort Lauderdale (2X-daily) and Dallas (daily). (SPR) launched an intra-state route from its Dallas/Fort Worth airport (DFW) base, connecting Texas’ two biggest airports with low-cost flights by beginning to operate twice-daily flights to Houston Intercontinental airport (IAH) on 20 September. The route, which is operated with (SPR)’s 145-seat A319 airplanes, competes with United (UAL)’s 57 and American Airlines (AAL)’s 47 flights a week. “We know that Houstonians have been hungry for low fares and we are thrilled to be here to satisfy that need,” said Texas native and (SPR)’s Senior VP & Chief Marketing Officer, Barry Biffle. “We are committed to saving our customers money on travel by offering them the lowest fares, and we look forward to giving our new customers from Houston the opportunity to take advantage of the ultra low fares that the rest of our growing customer base has come to know and love.”
(SPR) will launch daily, Denver - Phoenix service on October 4; daily, Portland, Oregon - San Diego on November 8; and daily, Houston service to Chicago O'Hare and Las Vegas on October 4.
Spirit Airlines (SPR) in 4th quarter (4Q) 2012 is planning to rework its schedule on some routes from its Fort Lauderdale base to the Caribbean through the elimination of flights to Nassau, Bahamas and transitioning service to Kingston, Jamaica to a seasonal offering. In both those markets (SPR) has a relatively small offering in comparison to its competitors, which includes JetBlue (JBL), on both the routes. Those market exits follow an earlier decision by (SPR) to end service from Dallas/Fort Worth to Boston in late 2012 as JetBlue (JBL) recently made its debut in the market. Three markets certainly do not account for a trend, but it does seem that (SPR) would prefer to expand where (JBL) does not operate, concluding it can better stimulate traffic in markets with a higher concentration of legacy competition.
(SPR) has a limited presence in terms of flights and seats on offer from its Fort Lauderdale headquarters to Kingston and Nassau. (SPR) offers three weekly flights to Kingston, which accounts for roughly 11% of the total 4,091 approximate one-way weekly seats (02-Sep-2012 to 08-Sep-2012) on offer from Fort Lauderdale. Caribbean Airlines (TTA) accounts for 53% of the seat share and (JBL) holds a 37% share.
October 2012: Spirit Airlines (SPR) launched three new USA domestic routes on 4 October. From Denver, Colorado (DEN), (SPR) added its second route to Phoenix-Mesa, Arizona (AZA) after its Dallas/Fort Worth route. (SPR) previously also served Phoenix-Mesa from Las Vegas, but capacity is now moved to the new Denver service. Flights operate daily with (SPR)’s 10C, 135Y-seat A319s. Although the route currently is uncontested, Frontier Airlines (FRO) will also launch daily flights between the two airports on 15 November. (SPR) also continued expanding out of Houston Intercontinental, Texas (IAH), taking on network carriers by launching daily services to both Chicago O’Hare (ORD) and Las Vegas (LAS). On the Chicago route, United (UAL) operates 79 weekly flights between its two hubs, while American Airlines (AAL) competes with a further 26 flights a week, and (SPR)’s Las Vegas route is operated in competition with (UAL)’s 50 weekly flights.
November 2012: Spirit Airlines (SPR) launched eight new routes on 8 November; seven domestic and one international to Los Cabos (SJD) in Mexico, which notably is a new destination for (SPR). “We’re excited to grow our network of ultra low fare options for our west coast customers in San Diego, California and Portland, Oregon with service to a new international destination – Los Cabos, Mexico,” said San Diego resident and (SPR)’s Senior Manager Route Planning, Robyn Platt. Three of the new routes are to Southwest Florida International Airport at Fort Myers, Florida (RSW), while the only route not to face direct competition is between Phoenix-Mesa, Arizona (AZA) and Chicago O’Hare (ORD). However, Allegiant (WJE) operates twice a week from Phoenix-Mesa to Chicago Rockford, and US Airways (AMW)/(USA), American Airlines (AAL) and United (UAL) fly between Phoenix and Chicago O’Hare with high frequencies.
December 2012: Spirit Airlines (SPR) is handing back its slots it had at Washington Reagan airport as they did not match its business model. (SPR) did add new destinations with Detroit from Denver, and Orlando from Houston (IAH) airport. (SPR) is also moving up its start dates for new Minneapolis and Philadelphia flights from Dallas-Fort Worth, as well as for some new Myrtle Beach flights.
(SPR) will launch Myrtle Beach service to Chicago O’Hare (daily, February 14), Detroit (daily, February 14), Latrobe (3X-weekly, February 14), Toronto (2X-weekly, February 15; increasing to 4X-weekly April 25) and Charleston, West Vitginia (2X-weekly, March 2; increasing to 3X-weekly April 25).
(SPR) has opened its new Dallas (DFW) crew base. It continues to recruit cabin attendants (CA).
January 2013: Spirit Airlines (SPR) will operate daily service to Myrtle Beach from Baltimore and Philadelphia, April 25 - November 5.
(SPR) is now serving more domestic cities from Dallas (DFW) than from Fort Lauderdale.
(SPR) added New Orleans (MSY) as its 15th destination from Dallas/Fort Worth (DFW) on 24 January. (SPR), the ultra-low-cost carrier (LCC) now operates a daily schedule on the 720 km route, in competition with American Airlines (AAL)’s (42) frequencies. The airport’s Chairman, Nolan Rollins, said: “The New Orleans Aviation Board is pleased that Spirit Airlines (SPR) recognizes the value in adding our airport and City to its diverse network that spans cities throughout the United States and a significant number of international destinations.”
February 2013: Spirit Airlines (SPR) earned net income of +$108.5 million in 2012, up +42.1% over a net profit of +$76.4 million in 2011.
(SPR) plans to grow capacity +21.5% in 2013 after capacity (ASM) expansion of +21.3% in 2012. It added 29 new markets last year, bringing its network to 110 markets. With deliveries of seven new A320s and two used A319s coming this year, (SPR) plans to grow capacity mostly by adding flights on existing routes, it said.
(SPR) President & (CEO), Ben Baldanza said (SPR)’s ultra-low cost model, in which it keeps base fares low and charges fees for nearly all add-ons, is gaining “ever-increasing acceptance.” He added, “Consumers love low fares and they love the option of paying for what they want and not paying for what they don’t want. And we’ve seen that in virtually all of our markets.”
To give an idea of how far (SPR) pushes the cost envelope, its A320s have 178 passenger seats, just one below the (FAA)’s maximum allowance of 179 seats on the type.
Spirit’s 2012 revenue grew 23.1% year-over-year to $1.32 billion while expenses increased 23.5% to $1.14 billion, producing operating income of +$174 million, up +20.5% over 2011. Full-year 2012 traffic rose +20.7% to 9.66 billion (RPM)s on a +21.3% lift in capacity to 11.34 billion (ASM)s, producing a load factor of 85.2% LF, up +0.4 point. Yield rose +1.9% to 13.64 cents as (RASM) increased +1.5% to 11.62 cents and (CASM) grew +1.8% to 10.09 cents. (CASM) ex-fuel, rose +4.9% to 6 cents.
(SPR) said its average base ticket revenue per passenger flight segment in 2012 was $75.11, down -7.2% from 2011, while ancillary revenue per passenger flight segment rose +14.7% to $51.39.
(SPR) launched daily, Houston - Orlando and 5X-weekly, Detroit - Denver service, increasing to daily on March 1.
(SPR) will launch daily, Las Vegas service from Baltimore and Philadelphia on April 25, daily, Houston - Los Angeles service on April 25, and seasonal daily, Minneapolis - Denver service April 25 to November 6.
March 2013: Spirit Airlines (SPR) increased the number of destinations it offers from Myrtle Beach, South Carolina (MYR) to nine on 1 March, when it inaugurated twice-weekly services to Charleston, West Virginia (CRW). This seasonal service, operated with (SPR)’s A319s, will be increased to thrice-weekly effective 25 April.
April 2013: SEE ATTACHED - - "SPR-2013-04 - UPDATE."
Spirit Airlines (SPR) began Philadelphia - Dallas/Fort Worth service. (SPR) began Philadelphia - Las Vegas, and Philadelphia - Myrtle Beach service on April 25. (SPR) began Dallas/Ft Worth - Cancun, - Los Angeles, - San Francisco/Oakland; Philadelphia - Las Vegas, - Myrtle Beach; Baltimore/Washington - Mrytle Beach, - Las Vegas; Houston - Los Angeles and Denver - Minneapolis. Beginning June 13 are Houston - Denver, - Detroit; Dallas - Los Cabos; and Dallas - Latrobe/Pittsburgh begins on June 14.
(SPR) signed a four-year airframe related components (ARC) contract with Lufthansa Technik (DLH) (LTK) for 28 of its A320 family airplanes. The contract covers thrust reverser overhaul for (SPR)'s A319, A320 and A321s with options for additional airplanes.
Lufthansa (DLH) will begin providing a dedicated amount of thrust reverser spares and 24-hour customer service this month at (SPR)'s main base of operations at Fort Lauderdale Airport (FLL), and its thrust reverser facilities in Sun Valley, California; Hamburg, Germany; and Shenzen, China.
(SPR) also has an (APU) repair and overhaul agreement for its entire fleet (49 airplanes) with Lufthansa Technik (DLH) (LTK).
(GE) Capital Aviation Services (GECAS) (GEF) announced it has signed a purchase and leaseback transaction with Spirit Airlines (SPR) for six new A320 airplanes to expand (SPR)’s fleet. (GEF) delivered the first airplane to (SPR) in March.
May 2013: Spirit Airlines (SPR) began summer service 4X-weekly, Fort Lauderdale - Kingston, Jamaica on May 10.
(SPR) began Dallas/Fort Worth - Cancun, -Los Angeles, -San Francisco/Oakland; Philadelphia - Las Vegas, -Myrtle Beach, South Carolina; Baltimore/Washington - Myrtle Beach, -Las Vegas; Houston - Los Angeles and Denver - Minneapolis. Beginning June 13 are Houston - Denver, -Detroit; Dallas - Los Cabos; and Dallas - Latrobe/Pittsburgh begins June 14.
June 2013: Spirit Airlines (SPR) has ordered 20 A321ceo airplanes.
July 2013: Spirit Airlines (SPR) earned a second-quarter net profit of +$42.1 million, up +21.6% compared to a net income of +$23.4 million in the year-ago period. Spirit (SPR)’s pre-tax margin, non-(GAAP), 17.8%, is reportedly the highest second quarter pre-tax margin in the company’s history.
A320-232 (5672, N621NK), ex-(F-WWBX), (GEF) leased.
August 2013: Spirit Airlines (SPR)’s board of directors has elected H McIntyre Gardner as Chairman after William Franke of Indigo Partners resigned. Indigo Partners’ John Wilson has also resigned.
Spirit Airlines (SPR) continues to expand outside its Fort Lauderdale base, announcing July 30 new flights from Phoenix in Arizona. On October 23, (SPR) will relocate its Phoenix operation from Phoenix-Mesa Gateway airport to the area's major international airport, Phoenix Sky Harbor International Airport.
The following day, (SPR) will launch one daily flight from Sky Harbor to Dallas/Fort Worth International airport.
On November 7, (SPR) will launch a seasonal daily flight between Phoenix and both Denver International airport and Chicago-O'Hare International airport. Those flights will operate through April 30, 2014, according to Spirit (SPR).
"Phoenix Sky Harbor airport fits (SPR)'s growth strategy by continuing to take customers to the big cities they want to go to at an affordable price," says (SPR)'s Senior Director Network Planning, Mark Kopczak.
Spirit Airlines (SPR) begins seasonal, Minneapolis/St Paul - Los Angeles, - Orlando, - Phoenix and – Tampa beginning November 7.
(AMG) Flite Components, a subsidiary of Aero Maintenance Group, which is a wholly owned AirFrance Industries (AFI) (KLM) (E&M) subsidiary, will support and repair radomes on Spirit Airlines (SPR)’s more than >50 A320-family airplanes. The multi-year agreement places spare radomes at key (SPR) maintenance locations and provides repair and full overhaul services for all (SPR) radomes.
Spirit Airlines (SPR)’s Dispatchers, represented by the Transport Workers Union (TWU), have ratified a new five-year labor agreement.
According to (SPR), the agreement provides improved pay for its Dispatchers “while maintaining efficiency and supporting the company’s continued growth and ability to offer ultra-low fares, optional services and low total prices for its customers.”
According to FAPA.aero, Spirit Airlines (SPR) is actively hiring pilots (FC) and expects to hire 20 pilots (FC) per month. (SPR) opened a Chicago base in July.
September 2013: A new study found that Alaska Airlines (ASA) is the most fuel efficient carrier in the United States. Using data reported gathered from the 2010 fuel-consumption reports submitted to the USA Bureau of Transportation Statistics, a study conducted by the International Council of Transportation (ICCT) found that (ASA) is able to travel the furthest on a gallon of jet fuel. (ASA) was the first USA carrier to train its pilots (FC) to fly (GPS)-guided required navigation performance (RNP) procedures in 1996, and was the first airline in 2009 approved by the (FAA) to conduct its own (RNP) flight validations.
The (ICCT) examined the fuel efficiency of the 15 largest airlines operating in the USA, and issued a fuel efficiency score based on the airline industry's average fuel economy within a given year. Spirit Airlines (SPR) and Hawaiian Airlines (HWI) tied for second on the list, trailed by Continental (CAL) and Southwest (SWA), all of which were separated by 2% or less on (ICCT)'s efficiency scale.
Low cost carrier (LCC) Allegiant Air (WJE) finished last, with a fuel efficiency rate 26 lower than Alaska (ASA)'s, which is attributable to the airline's fleet including aging McDonnell Douglas airplanes.
Spirit Airlines (SPR) has appointed John Bendoraitis as its Senior VP & (COO). Beginning mid-October, Bendoraitis will be responsible for leading (SPR)’s Flight Operations, In-flight, Technical Services/Maintenance, Airport Operations, Safety, and Supply Chain/Operations Support departments. He has been Frontier Airlines (FRO) (COO) since March 2012. Bendoraitis served as President of Comair (COI) from 2008 - 2012 and was President of Compass Airlines from 2006 - 2008.
October 2013: Spirit Airlines (SPR) has earned a net profit of +$61.1 million for the third quarter, nearly doubling net income of +$30.9 million in the 2012 September quarter, on a +33.4% year-over-year jump in revenue to $456.6.
(SPR) altered its offering from Dallas/Fort Worth (DFW) as it moved its Phoenix operation from Phoenix Mesa to the city’s main airport. Beginning on October 24th, (SPR) offers daily flights from the Texan airport to Phoenix (PHX). The new service is operated using A320s and faces competition from American Airlines (AAL)’s 60 and US Airways (AMW)/(USA)’s 37 weekly flights.
November 2013: Profit growth of nearly +98% by Spirit Airlines (SPR) in 3rd Quarter 2013 was dampened by (SPR)’s revelation that it will encounter some cost headwinds at Year End 2013 and into 2014. These are driven by possible expenses related to an engine failure incident that occurred in October 2013, increasing costs due to new flight duty and rest time regulations for pilots (FC) and a +22% average growth rate during the next couple of years.
Spirit Airlines (SPR) commenced operations on six new routes on November 7th. Of these, two involve new services from Phoenix (PHX) that were moved from Phoenix-Mesa. The remaining four routes were launched from Minneapolis-St Paul (MSP). All newly launched services are operated with daily frequencies and face competition from at least one carrier. Routes are as follows:
Chicago O'Hare (ORD) to Phoenix (PHX) 7x weekly A320s vs US Airways (AMW)/(USA) 37x weekly, (AAL) 32x weekly & (UAL) 26x weekly; Phoenix (PHX) to Denver (DEN) 7x weekly A319s vs Southwest Airlines (SWA) 61x weekly, (AMW)/(USA) 37x weekly, (UAL) 31x weekly & Frontier Airlines (FRO) 30x weekly; (MSP) to Los Angeles (LAX) 7x weekly A319s vs Delta Airlines (DAL) 42x weekly & Sun Country Airlines (SCA) 11x weekly; to Orlando (MCO) 7x weekly A319s vs (DAL) 28x weekly, (SCA) 8x weekly & (SWA) 7x weekly; to (PHX) 7x weekly A319s vs (DAL) 33x weekly; (AMW)/(USA) 30x weekly, (SWA) 14 x weekly and (SCA) 7x weekly; to Tampa (TPA) 7x weekly A319S vs (DAL) 20x weekly.
As those warnings cause some uncertainty around (SPR)’s unit cost containment, (SPR)’s rapid expansion into the continental USA during the past few years is resulting in a typical pattern of perhaps strong 1st Quarter and 3rd Quarter profits, and 2nd Quarter and 4th Quarter performances that do not quite reach the levels recorded in the peak periods. (SPR) has stated that its 4th Quarter 2013 results should be similar to 1st Quarter 2013: – when top-line revenue grew +23% and net income increased +31% year-on-year.
Spirit Airlines (SPR) says an A319 that sustained an engine failure last month will return to service only late this year or in early 2014. The A319 pylon holding the powerplant must be replaced, (SPR) (CEO), Ben Baldanza said. "It's going to take a while," he said. "That's usually not something that is changed on an airplane. It's going to be a six to eight week effort and it's already early November."
The International Aero Engines (IAE) (V2500) powerplant failed in-flight on the A319 on October 15, which forced the Atlanta-bound airplane to return to Dallas/Fort Worth International airport.
Baldanza says it is still not clear what went wrong with the engine, adding that investigations are ongoing. (SPR) has estimated an additional +$10 million in costs in the fourth quarter due to this incident. Baldanza explained that this cost includes the expense of wet-leasing at least one airplane to replace the A319 that is now out of service. While (SPR) usually has spare airplanes, it expects that it will be required to wet-lease an airplane during the upcoming Thanksgiving holiday season to ensure that it operates all of its flights. The $10 million cost will not include the cost of fixing the engine, which will instead hang on the airline's balance sheet and will be amortized over time, he added.
He estimated that the (IAE) (V2500) engine involved in the incident had performed 1,200 - 1,400 cycles since its last restoration at the time of the incident. "We bought that engine new," said Baldanza.
(SPR) expects to recover some of the $10 million cost through some form of insurance or compensation, which will then be accounted for in the first or second quarter of 2014.
December 2013: A320-232 (5458, N618NK) has special "Greetings from Fort Worth" postcard colors advertising Dallas (DFW) airport. A320-232 (5880, N624NK), ex-(F-WWII), (GEF) leased.
January 2014: Spirit Airlines (SPR) added New Orleans, Louisiana (MSY) as its 15th destination from Dallas/Fort Worth (DFW) on January 24th. The ultra-low-cost carrier now operates a daily schedule on the 720 km route, in competition with American Airlines (AAL)’s (42) frequencies.
February 2014: Spirit Airlines (SPR) plans to continue growing aggressively over the next several years after posting net income of +$176.9 million in 2013, up +63.1% over a 2012 net profit of +$108.5 million.
The Fort Lauderdale, Florida-based “ultra” low-cost carrier (LCC) increased capacity +22.2% year-over-year in 2013 to 13.86 billion (ASM)s and plans to boost annual (ASM)s by +17% in 2014 and another +29% in 2015.
(SPR) took delivery of four A320s in the 2013 fourth quarter, ending the year with 54 airplanes. With only a 1.5% share of the USA air passenger market, (CEO) Ben Baldanza said Spirit (SPR) can grow at a fast clip while maintaining strong profitability.
(SPR) is targeting a 16% - 18% operating margin in 2014. “We continue to believe that (not only through this year and 2015 but beyond) we [will be] able to maintain that average annual growth rate of +15% to +20% and do that without compressing our margins,” Baldanza told analysts and reporters.
(SPR)’s business model is based on keeping base fares low, while charging fees for nearly all services. Currently, ancillary fees account for just over >40% of (SPR)’s total revenue. Baldanza said (SPR) aims to have ancillary fees account for 50% of total revenue.
“We don’t see reduced consumer spending,” Baldanza said. “We feel that it’s a very strong [revenue] environment. There’s a group of people out there who are always going to want to spend less getting there. We’re very early on in the growth curve for our company, not unlike where Southwest [Airlines] (SWA) was in the early 1980s.”
(SPR)’s 2013 revenue rose +25.5% year-over-year to $1.65 billion, while expenses increased +19.9% to $1.37 billion, producing an operating profit of +$282.3 million, up +62.2%.
With 2013 traffic of 12 billion (RPM)s, up +24.2% compared to 2012, (SPR) achieved a load factor of 86.6% LF, up +1.4 points. Average yield increased +1.1% year-over-year to 13.79 cents.
Baldanza confirmed (SPR)'s bid for Washington National (DCA) slots divested by American Airlines (AAL) and US Airways (AMW)/(USA). “We did not win and we’re OK with that because we didn’t want to overpay,” he said.
(SPR)’s 2013 fourth-quarter net profit was +$43.2 million, more than doubling 2012 December quarter net income of +$19.6 million, on a +27.9% rise in revenue to $420 million.
Route Network Update for Spirit Airlines (SPR):
Spirit Airlines ((IATA) Code: NK, based at Fort Lauderdale International) (SPR) network changes:
Dallas/Fort Worth - Latrobe route will be terminated on April 2, 2014.
Latrobe - Dallas/Fort Worth route will be terminated on April 2, 2014.
(SPR) begins daily, Oakland - Chicago (ORD) service on May 1. Also daily Minneapolis/St Paul - Houston (IAH) and – Baltimore runs May 1 - November 1. (SPR) adds daily seasonal, Chicago O’Hare - Baltimore/Washington and –Portland from May 22 - November 1.
March 2014: Spirit Airlines (SPR) has selected the Exelis airplane surveillance solution, "Sypmhony OpsVue" to provide visual tracking of its airplane fleet while on the ground. The (SPR) fleet is equipped with (ADS-B) transponders, which will enable the Symphony OpsVue tracking of the airplanes, while on the airport surface in the taxiway, ramp or gate.
“The Exelis solution will allow us to effectively manage tarmac delay requirements, improve diversion management and provide critical decision-support information during both routine and irregular operations,” said Jyri Strandman, VP Flight Operations for Spirit Airlines (SPR). “Using this information will enable us to better monitor surface movement of our airplanes to meet our mission of providing safe, ultra-low cost and efficient air transportation.”
For the second consecutive month, after 15 months of reported declines, full-time equivalent (FTE) employment at USA scheduled passenger airlines has registered a monthly increase year-over-year.
In February, USA scheduled passenger airlines employed 381,985 full-time workers, up +0.4% year-over-year, according to figures from the USA Department of Transportation’s Bureau of Transportation Statistics (BTS).
It was the third consecutive month in which full-time equivalent (FTE) jobs at USA scheduled passenger airlines increased year-over-year. The February total registers +1,571 more (FTE) jobs among USA scheduled passenger carriers than in February 2013.
Among the USA major/network carriers, year-over-year increases in February (FTE) jobs were seen at US Airways (AMW)/(USA) (up +3.6%), Alaska Airlines (ASA) (up +2.7%), American Airlines (AAL) (up +0.4%) and Delta Air Lines (DAL) (up +0.2%). United Airlines (UAL) reported losing -1.8% of its (FTE) positions year-over-year. Overall, the USA major/network carriers saw a +0.1% year-over-year increase in February (FTE) employees.
Hawaiian Airlines (HWI), a major carrier classified by (BTS) as an “other carrier” (airlines that operate within specific niche markets) reported a year-over-year February increase of +332 (FTE) positions, up +7.5%.
Overall, (FTE) positions at the major USA low-cost-carriers (LCCs) grew +0.7% year-over-year in February. Spirit Airlines (SPR) had the largest concentration of year-over-year growth, expanding its February (FTE) job count by +16.8%, to 3,534 (FTE) employees; Allegiant Air (WJE)’s monthly (FTE) job count grew as well, up +14.3% from February 2013, to 2.134 (FTE) employees. Increases also occurred at Virgin America (VUS) (up +6.7%) and JetBlue Airways (JBL) (up +4.9%). February (FTE) job declines were seen at Frontier Airlines (FRO) (down -7.4%) and Southwest Airlines (SWA) (down -1.7%).
Sun Country Airlines (SCA), a national carrier/(LCC) classified by (BTS) as an “other carrier,” registered a year-over-year February increase of +169 (FTE) positions, up +17.4%.
Ranked by (FTE) workforce, the top 10 passenger airlines for February were: United Airlines (UAL) (80,694 (FTE) employees), Delta Air Lines (DAL) (73,602), American Airlines (AAL) (59,699) (less US Airways (AMW)/(USA) - see later, Southwest (SWA) (45,091), US Airways (AMW)/(USA) (31,604), JetBlue Airways (JBL) (13,301), and Alaska Airlines (ASA) (10,192).
April 2014: Spirit Airlines (SPR) reported a first-quarter net profit of +$37.7 million, up +23.4% from $30.6 million net income in the year-ago period. President & (CEO), Ben Baldanza said, “During the first quarter, our team did a great job serving our customers, while overcoming the challenges caused by numerous severe winter storms and managing to the new crew duty and rest rules. Our solid operational and financial performance in the first quarter is a great start to the year and provides a firm foundation as we grow our business and bring our low fares to more people in more places.”
(SPR)’s first-quarter revenue was $438 million, up +18.2% year-over-year, while expenses rose +17.9% to $378 million, producing an operating profit of +$60 million, up +20.7% from the year-ago quarter. (SPR) said that the revenue increase was “primarily driven by our growth in flight volume.” In the first quarter, (SPR) said it had 256 weather-related flight cancellations compared to 59 in the first quarter 2013, which negatively impacted revenue for the quarter.
First-quarter traffic increased +23.6% year-over-year to 3.29 billion (RPM)s on a +21% rise in capacity to 3.78 billion (ASM)s, producing a load factor of 86.9% LF, up +1.8 points. Average yield declined -4.3% to 13.32 cents.
(SPR)’s apparent discussions with Miami International airport over the prospects of launching service from the airport seem a bit illogical on the surface, given that (SPR) calls nearby Fort Lauderdale International "home." But (SPR)’s expansion plans, coupled with the changing competitive dynamics at Fort Lauderdale during the past couple of years, might make flights to Miami plausible. (SPR) is obviously keeping any potential plans for Miami close to its chest as it charts a potential delicate course in possibly serving two airports in the South Florida market. But stripping out the sensitivities serving Miami would create, the airport fits nicely with Spirit (SPR)’s market strategy: – an airport dominated by a legacy carrier that presumably charges higher fares.
In the ever-changing global airline market, there is a growing sense the playbooks of old are being tossed aside as market forces dictate new approaches to maximizing profitability. In that sense, Spirit (SPR) has to consider all options for expanding its ultra low-cost carrier (ULCC) model, even if that means launching service from another airport practically in its backyard.
In the first quarter, (SPR) took delivery of two new Airbus A320 airplanes, ending the quarter with 56 airplanes in its fleet. During the quarter, (SPR) signed an amendment to its airplane order with Airbus (EDS); changes include the conversion of five A320ceos to A321ceos, the conversion of five A320neos to A321neos, the acceleration of one A321ceo from 2016 to 2015, and the deferral of two A320ceos from 2017 to 2018.
May 2014: Spirit Airlines (SPR) expanded its domestic offering with three new services, all of which were launched on May 1st and will be operated daily by its 145-seat A319s. (SPR) inaugurated from Minneapolis St Paul (MSP) the 1,664 km sector to Houston Intercontinental, Texas (IAH), as well as the 1,506 km route to Baltimore/Washington, Maryland (BWI), both being served until November 1st. Furthermore, (SPR) commenced services from Chicago O’Hare (ORD) to Oakland, California (OAK). Only the two airport pairs launched from Minneapolis St Paul will face direct competition, from Delta Air Lines (DAL) (35x) and United Airlines (UAL) (32x) to Houston Intercontinental and (DAL) (20x) to Baltimore/Washington.
(SPR) will begin daily, New Orleans - Fort Lauderdale (FLL) and - Houston (IAH) starting on August 1.
July 2014: Spirit Airlines (SPR) posted a second-quarter net profit of +$64.8 million, up +54.2% year-over-year from (SPR)’s +$42.1 million net income in the 2013 June quarter. The results further bolster (SPR)’s 2014 profitability (building on its first-quarter +$37.7 million net profit, which was a +23.4% improvement over 2013’s first-quarter.
Excluding the impact of special items, (SPR) reported a record second-quarter adjusted net income of +$66.5 million, up +45.2% year-over-year, compared with the company’s adjusted net income of +$45.8 million in the year-ago quarter.
(SPR)’s pre-tax margin for the second-quarter was 20.8% (contrasted with 16.4% in the 2013 second quarter); (SPR)’s adjusted pre-tax margin, non-(GAAP), came to 21.3% (compared to 17.8% year-over-year).
“[We] delivered another strong quarter,” Spirit (SPR) (CEO), Ben Baldanza said. “Our efforts have produced material improvements in controllable components of our cost structure which contributed to the 3.5% point year-over-year increase in our adjusted operating margin.”
(SPR)’s operating revenue for the second quarter was $499.3 million, up +22.6% year-over-year. Operating expenses grew +15.7% to $394.2 million, producing operating income of $105.1 million, up +57.5% from the year-ago quarter. “The increase was driven by our growth in flight volume, higher load factors and higher operating yields,” (SPR) said.
Non-ticket operating revenue was up +18.4% year-over-year, to $196.9 million (39.4% of (SPR)’s total second-quarter operating revenue). The company reported $55.15 in average ancillary revenue per passenger flight segment, up +3.2% year-over-year. As an (LCC), Spirit (SPR) charges fees for nearly all services. “A few months ago, we launched a series of initiatives aimed at better aligning our customers’ expectations with the (SPR) business model,” Baldanza said. “We are very encouraged at the early results . . . the ‘Bare Bones plus Frill Control’ messaging is resonating well with customers as they see the benefit of only paying for what they truly value.”
As of June 30, (SPR) had 2014’s second-highest year-to-date load factor ((87.2% LF, following only Allegiant Air (WJE) (at 88.8% LF)).
(SPR)’s second-quarter traffic increased +19.6% year-over-year to 3.5 billion (RPM)s. Capacity grew +17.2% to 4 billion (ASM)s, resulting in a load factor of 87.5% LF, up +1.8 points. Average yield grew +2.4% to 14.24 cents.
The company took delivery of one new Airbus A320 during the second-quarter, bringing (SPR)’s fleet to a total of 57 airplanes. The carrier expects to receive eight additional A320s by the end of the year.
In one of the smartest marketing campaigns this year, USA ultra-low cost carrier (ULCC) Spirit Airlines (SPR) has launched a “hug the haters” promotion.
(SPR) (CEO), Ben Baldanza, who is also one of the smartest airline (CEO)s out there and who regularly makes fun of himself and his (nicely profitable) airline, says in the press release, "We want to change the way people think about air travel and educate them about the Spirit (SPR) way of traveling. We're going to Hug The Haters. They can share their frustrations with flying, and in return, we're going to give them 8,000 FREE SPIRIT Miles, which gets them very close to an award flight."
And those Fort Lauderdale, Florida-based folk have come up with this entertaining video: http://www.globenewswire.com/NewsRoom/Attachment/26362 The song, which admits many of its passengers seem to hate them and send them hate tweets, includes the wonderful line: “It’s a cheap seat for a cheap ass.”
And they invite people to go to Hatethousandmiles.com to “let go of their hate” and learn why and how Spirit (SPR) keeps their costs low so they can go, even if, as the song says, some people would rather eat glass.
August 2014: Spirit Airlines (SPR) begins daily, Chicago O'Hare (ORD) - Atlanta on November 2, daily, (ORD) - New Orleans on November 6, and daily, (ORD) - Baltimore (BWI) on November 6. (SPR) also begins daily, Detroit - Atlanta on November 2, and daily, Detroit - New Orleans on November 6.
(SPR) and its flight attendants (CA), represented by the Association of Flight Attendants, have reached a tentative agreement on a five-year contract.
The tentative agreement, which is subject to ratification by the flight attendant membership, planned for fourth quarter 2014, was unanimously supported by the union’s leadership. The agreement was reached with the assistance of the National Mediation Board.
Spirit Airlines (SPR)’s Airbus (EDS) fleet is to grow by over >20 airplanes in the next 18 months; has the potential for many new services from USA airports. As the 8th largest airline in the USA, (SPR) added 17 new routes in the last year and dropped just four.
In the first six months of 2014, Spirit Airlines (SPR) has seen its passenger numbers rise by +16.2% to 6.8 million, while its load factor has increased to 87.2% LF. Ranked 8th among USA airlines in terms of monthly seat capacity, it is the second-fastest growing significant USA airline (after Allegiant Air (WJE)). (SPR) has grown its summer network from 116 routes last summer to 133 routes this summer. This net gain of +17 routes comprises 21 new routes (or routes that are now operating in the summer, as well as the winter) and four dropped routes, all of which have been from (SPR)’s second biggest base of Dallas/Fort Worth. The average weekly frequency of routes has fallen slightly from 8.1 flights per week to 7.9 flights per week.
SEE CHART - - "SPR-2014-08 TOP 15 AIRPORTS." Fort Lauderdale in Florida is by far (SPR)’s busiest airport and is connected non-stop to 43 destinations, up just one since last summer, with the addition of flights to New Orleans on August 1st. Back in May 2011, operations were yet to begin at Dallas/Fort Worth. A total of 55 airports are currently served, with Kansas City being the most recent airport to receive (SPR)’s services and Phoenix Sky Harbor Airport replacing Phoenix-Mesa Airport. Although 26 of (SPR)’s 55 airports are outside of the USA, these routes only account for around 11% of (SPR)’s capacity (ASK)s.
In the last 12 months, (SPR) has started 17 new routes which are still operating this summer. All of them are operated with daily service. These involve a total of 16 airports all of which are in the USA:
* Atlanta (ATL): to Houston Intercontinental
* Baltimore/Washington (BWI): to Chicago O’Hare, Minneapolis-St. Paul
* Chicago O’Hare (ORD): to Baltimore/Washington, Kansas City, Oakland, Portland
* Dallas/Fort Worth (DFW): to Kansas City, Phoenix Sky Harbor
* Denver (DEN): to Phoenix Sky Harbor
* Detroit (DTW): to Kansas City, Minneapolis-St. Paul
* Fort Lauderdale (FLL): to New Orleans
* Houston Intercontinental (IAH): to Atlanta, Kansas City, Minneapolis-St. Paul, New Orleans
* Kansas City (MCI): to Chicago O’Hare, Dallas/Fort Worth, Detroit, Houston Intercontinental, Las Vegas
* Las Vegas (LAS): to Kansas City
* Los Angeles (LAX): to Minneapolis-St. Paul
* Minneapolis-St. Paul (MSP): to Baltimore/Washington, Detroit, Houston Intercontinental, Los Angeles
* New Orleans (MSY): to Houston Intercontinental, Fort Lauderdale
* Oakland (OAK): to Chicago O’Hare
* Phoenix Sky Harbor (PHX): to Dallas/Fort Worth, Denver
* Portland (PDX): to Chicago O’Hare.
Other new routes that are scheduled to start before the end of the year include; Chicago O’Hare to Atlanta and New Orleans, Detroit to Atlanta and New Orleans, Houston Intercontinental to Fort Lauderdale and San Diego. In addition, there will be new seasonal routes this winter between Boston and Palm Beach, Latrobe/Pittsburgh and Fort Myers, and Latrobe/Pittsburgh and Tampa.
The four routes dropped from Dallas/Fort Worth in the last year were Houston Intercontinental (ended September 3rd 2013), Latrobe (ended April 2nd 2014), Phoenix-Mesa (ended October 23rd 2013) and Toluca (ended September 3rd 2013). As a result of all these network changes (SPR)’s average sector length in the first half of 2014 has increased by +5.3% to 988 miles.
Spirit Airlines (SPR) started serving Kansas City (MCI) with five links, all of which are operated daily using its 145-seat A319s. With the longest sector being the 1,833 km route from Las Vegas,(LAS), and the shortest being inaugurated from Chicago O’Hare (ORD) at 649 km, (SPR) will face competition on all of the five new additions from United Airlines (UAL), American Airlines (AAL), Delta Air Lines (DAL) and Southwest Airlines (SWA).
Spirit Airlines (SPR)’s current summer network (SEE ATTACHED - - "SPR-SUMMER NETWORK 2014") comprises 133 routes spread across 55 airports. All the routes to the Caribbean and Latin America account for only around 11% of (SPR)’s capacity.
At the end of 2013, (SPR) operated a fleet of 54 airplanes; 29 145-seat A319s, 23 178-seat A320s, and two 218-seat A321s. By USA standards, this is considered high-density seating, but it is worth noting that easyJet (EZY) puts 156 seats on its fleet of A319s, while most (LCC)s in Asia and Europe operating the A320 manage to accommodate 180Y people.
In the first half of 2014, (SPR) has added a further three A320s, with a fourth being added during the third quarter. However, in the last quarter of 2014, seven additional A320s will join the fleet followed by eight more in the first half of 2015. With six A321s scheduled to arrive in the second half of 2015, as well as (SPR)’s first A320neo at the end of 2015, the fleet will have grown in size by almost +50% in just two years, with available seats growing by more than >+50%. It seems likely that route development folk from airports across the USA will be making regular visits to (SPR)’s HQ in Miramar, Florida in the hope of benefitting from (SPR)’s rapid growth.
September 2014: Spirit Airlines (SPR), which on August 7th arrived at Kansas City with five routes, continued to expand its domestic offering with the addition of two airport pairs from Houston Intercontinental (IAH), both of which are served daily using (SPR)’s 145-seat A319s. On September 3rd, (SPR) launched operations on its fifth link to San Diego (SAN), as it already serves the airport from Dallas/Fort Worth, Las Vegas, Portland, and San Jose del Cabo. Furthermore, on September 4th, it inaugurated flights on the 1,553 km sector to Fort Lauderdale (FLL). The 2,097 km airport pair to San Diego faces direct competition from United Airlines’ 32 weekly flights, while the new route to Fort Lauderdale is also already served by United (UAL) with 25 weekly services. (SPR), which on August 7th arrived at Kansas City with five routes, continued to expand its domestic offering with the addition of two airport pairs from Houston Intercontinental, TX (IAH), both of which are served daily using the LCC’s 145-seat A319s. On 3 September, the carrier launched operations on its fifth link to San Diego (SAN), as it already serves the airport from Dallas/Fort Worth, Las Vegas, Portland and San Jose del Cabo. Furthermore, on September 4th, it inaugurated flights on the 1,553 km sector to Fort Lauderdale (FLL). The 2,097 km airport pair to San Diego faces direct competition from (UAL)’s 32 weekly flights, while the new route to Fort Lauderdale is also already served by (UAL) with 25 weekly services.
Spirit Airlines (SPR) has unveiled a new livery that it said “matches the bright and bold branding the company announced in May.” SEE ATTACHED - - "SPR-2014-09 - NEW LIVERY ON A319."
The bright yellow airplane with black trim began service with a flight from Atlantic City to Fort Lauderdale. “This new livery perfectly matches (SPR),” (SPR) President & (CEO), Ben Baldanza said. “It’s radically different from other airlines, and it’s fun, just like we are. When you see this plane in the air (or on the ground) there will be no question that this is a (SPR) plane.”
(SPR) said the new livery also “matches its low-cost business philosophy. The simple, two-color design is much more cost-effective than more complex, multi-colored designs. Additionally, since (SPR) does not spend money on expensive advertising campaigns, the bold and bright design acts as a flying billboard and captures a lot of attention with no additional cost. These savings are passed on to customers with even lower fares,” (SPR) said.
The Airbus A319 is the first of (SPR)’s fleet to get the new design. Six more airplanes will receive the new livery in the few months. New airplanes currently on order will come with the new design beginning next year. (spr) said its airplanes currently in service will keep existing designs until their regularly scheduled timeframe to be repainted.
To see a video of the repainting, click here: http://vimeo.com/106319732
October 2014: News Item A-1: Spirit Airlines (SPR) posted third-quarter net income of +$67 million, up +9.7% over a +$61.1 million net profit in the prior-year period, and is confident it will lower unit costs in 2015, even as it grows capacity significantly.
The Florida-based “ultra” low-cost carrier (ULCC) is planning to increase capacity by +30% year-over-year in 2015, as it takes delivery of 15 new airplanes, including six Airbus A321s. It will receive its first A320neo in the 2015 fourth quarter. (SPR) (CEO), Ben Baldanza acknowledged to analysts that the rapid growth may dent (SPR)’s unit revenue performance, but he predicted (SPR) will be able to decrease costs to offset any revenue hit.
“We’ve always felt good about our growth in 2015,” Baldanza said. “If we can drive higher margins with a little lower (RASM) and a lower (CASM), that’s good for us. Our costs are going to be great, so margins might actually improve.”
(SPR) provided guidance for a -4% year-over-year decrease in (CASM) ex-fuel in the 2015 first quarter on a +26% increase in (ASM)s. (SPR)’s operating margin in the 2015 March quarter is expected to be around 20%.
(SPR) plans to add 22 A320 family airplanes to its fleet from the fourth quarter of 2014 through the end of 2015. It ended the third quarter with 58 airplanes, took delivery of an A320 earlier this month, and will take delivery of six more A320s by the end of 2014.
(SPR) will hire 250 pilots (FC) in 2015 to handle the big capacity boost, and (CFO), Ted Christie said finding new pilots (FC) has not been an issue for (SPR). “The line is out the door for guys wanting to come to fly here,” Christie told analysts.
Baldanza reiterated his belief that there is ample room to grow in the USA (ULCC) sector, saying that (SPR) continues to create new passengers, rather than stealing traffic from other airlines. “We don’t really see any meaningful competition in the (ULCC) space, other than Allegiant (WJE), but (WJE) is serving different-size cities than we are, so (WJE) is more synergistic than competition,” he said.
(WJE)’s third-quarter revenue rose +13.8% year-over-year to $519.8 million, while costs increased +16.9% to $419.6 million, producing an operating profit of +$100.2 million, up +2.4% compared to operating income of +$97.8 million in the 2013 September quarter. Net profit through the first nine months of 2014 was +$169.6 million, up +26.8% from net income of +$133.7 million in the first three quarters of 2013.
(SPR)’s third-quarter traffic increased +12.8% year-over-year to 3.66 billion (RPM)s on a +14.7% lift in capacity to 4.17 billion (ASM)s, producing a load factor of 87.6% LF, down -1.5 points. Yield improved +0.9% to 14.21 cents.
(SPR)’s third-quarter average revenue per passenger flight segment was $138.54 (up +2.4% year-over-year), comprising $84.50 in base ticket price and $54.04 in ancillary revenue.
News Item A-2: Spirit Airlines (SPR) begins daily, Cleveland - Orlando, - Tampa (3x-weekly, seasonal), Fort Myers (4x-weekly, seasonal), January 15; - Fort Lauderdale, Dallas/Fort Worth, Las Vegas (daily, February 5); - Los Angeles (daily, April 16), - Myrtle Beach (daily, April 16, seasonal).
November 2014: News Item A-1: Southwest Airlines (SWA) could be planning a competitive response to Spirit Airlines (SPR)’s recent decision to add seven new routes to Mexico and Central America from Houston’s George Bush Intercontinental Airport.
Spirit Airlines (SPR) increased its seasonal offering from Boston (BOS) on November 14th, adding its second route to West Palm Beach, Florida (PBI). The 1,926 km sector will be served daily until April 15th, using (SPR)’s 178-seat A320s. JetBlue Airways (JBL) is already flying this airport pair with 36 weekly flights. In addition, (SPR) also operates to West Palm Beach from Atlantic City with daily services.
News Item A-2: The following is from Air Transport World (ATW)'s Aaron Karp's blog:
Spirit Airlines (SPR) (CEO), Ben Baldanza broke into an impression of "Curb Your Enthusiasm" star, Larry David during (SPR)’s third-quarter earnings conference call. “I’d say we feel pretty, PRETTY good,” he jovially said while discussing (SPR)’s present and future financial status.
Unlike the perpetually cranky comedian, Baldanza has little to complain about these days. Profitable (SPR) is poised for a major expansion next year (adding 15 new airplanes, including six Airbus A321s and an A320neos) and believes its 2015 operating margin will be around 20% even as it grows capacity by +30% year-over-year.
(SPR) designs its business model for a high fuel cost environment. So the recent dip in fuel prices is icing on the cake for the “ultra” low-cost carrier (ULCC). “Lower fuel prices create a little bit of tailwind in the margin,” Baldanza said. “We are a margin driven airline.”
Baldanza thinks (SPR) has two things really going for it right now: 1) there appears to be ample room to grow in the (ULCC) sector in the USA and 2) Spirit (SPR) is basically unopposed in that sector.
(SPR) doesn’t concern itself too much with what the major USA airlines are doing because it believes it is targeting an entirely different group of passengers, who care about ultra low fares above all else. “We’re carrying different customers than Delta (DAL) or Southwest (SWA) is carrying,” Baldanza said. “In general, our decision about where to fly is about how much new traffic we can generate with our lower fares, not about how much traffic we can take away from X, Y and Z. When we believe we can fill an airplane, we’ll add a flight. That’s kind of how it works.”
And neither (ULCC)s Frontier Airlines (FRO) (a newcomer to the sector Baldanza has been fairly dismissive of) nor Allegiant Air (WJE) are viewed as significant rivals at this point. “We don’t really see any meaningful competition in the (ULCC) space, other than (WJE), but Allegiant (WJE) is serving different size cities than we are, so (WJE) is more synergistic than its competition,” Baldanza explained.
Spirit (SPR), to its credit, does not hide from the Larry David-esque complaining, passengers engage in regarding (SPR)’s low-amenity, fee-heavy pricing structure. In fact, this week it issued a “State of Hate” report replete with a video of puppet newscasters chronicling the “frustrations” expressed to (SPR) about it and air travel in general. One “surprising aspect of the feedback was the level of vitriol and expletives used in many of the hate messages,” (SPR) noted, adding that it has created a “Vulgarity Index” for “the different curse words that are used to describe the respondents’ hate for air travel.”
December 2014: News Item A-1: Southwest Airlines (SWA) could be planning a competitive response to Spirit Airlines (SPR)’s recent decision to add seven new routes to Mexico and Central America from Houston’s George Bush Intercontinental Airport.
Spirit Airlines (SPR) begins new services from Houston to: Tampa, daily (March 26); (BWI), daily (March 27); Oakland, daily (April 16); Cancun, 3x-weekly (May 7 then to daily June 11); Los Cabos, 2x-weekly (May 7 increasing to 4x-weekly June 11); Toluca/Mexico City (May 7, 2x-weekly increasing to 3x-weekly June 11). New services to Central American cities all begin May 28: Managua, 3x-weekly; San Jose, 4x-weekly; San Pedro Sula, 3x-weekly; San Salvador, 4x-weekly.
(SPR) begins daily, Denver - Los Angeles service on April 16.
News Item A-2: Lufthansa Technik (DLH) (LTK), the airplane maintenance wing of (DLH), is strengthening its presence in the Americas with a new overhaul facility, Lufthansa Technik Puerto Rico. The company recently broke ground on the 215,000 square foot facility located in Aguadillo, Puerto Rico, which will be ready to start providing base maintenance for Airbus A320s in July 2015. Spirit Airlines (SPR) will be Lufthansa Technik (DLH) (LTK)'s first customer next year, followed by JetBlue (JBL).
JetBlue (JBL) is already the dominant carrier in the Caribbean, with a strong hub in Puerto Rico," Lufthansa Technik Puerto Rico (CEO), Elmar Lutter told "Avionics Magazine." “Spirit (SPR) flies into Aguadilla as well, what makes exchanging airplanes between operations and maintenance extremely easy. (SPR) has been an (DLH) (LTK) customer for a long time. Puerto Rico is as ideal a location as Florida without the upward pressure on prices and wages there."
Initially, the facility's five maintenance lines will provide service for A320 airplanes, according to Lutter. Eventually though, it will look to start providing service for the Boeing 737NG, he added. The services offered at the new facility will include "avionics installation and troubleshooting, related to all repairs and modifications on the airplane available for the A320," according to Lutter.
The Puerto Rico announcement is the latest in a series of 2014 moves by (DLH) (LTK), Germany's largest airplane maintenance company, which included appointing a new chairman for its executive board; a renewed business jet cabin interior design agreement with Airbus; the introduction of its new e-configuration tools for pre-customized cabin designs; and an announcement that the company plans to invest more than >$247 million toward the development of production technologies, measurement technology, improved (MRO) services, fault diagnosis and prognosis, robot-assisted repair processes, and automated test procedures.
Miramar, Florida based Spirit Airlines (SPR) is looking forward to the opening of the new facility in a city that it flies to three times per week, Charlie Rue, VP of (SPR)’s supply chain, said during an interview with Avionics Magazine.
"As far as dropping in airplanes, having the (DLH) (LTK) team do the maintenance and then ferrying the airplane out, we can basically ferry live airplanes in and live airplanest out by just swapping what airplane is on the schedule with the one that’s in heavy maintenance," said Rue.
Currently, (SPR) has a fleet of 63 Airbus A320 family airplanes, which the new facility will reportedly specialize in. "What we think is going to happen in Puerto Rico is we’re going to get an efficiency factor that is the number of hours it will take to complete our heavy checks, that will be materially different than what we have seen before. Some of that will be better than what were doing in the USA and certainly better than competing locations in Central America," said Rue. "Right now, we have our maintenance done in Tampa with (PEMCO) (ASC). We’ll probably still do some work there, but our core heavy maintenance will be done in Aguadilla."
The next big overhaul process that (SPR) will undergo, will be the installation of NextGen-compliant Automatic Dependent Surveillance Broadcast (ADS-B) Out avionics, some of which Rue said will be done in Puerto Rico.
January 2015: News Item A-1: As Air Transport World (ATW) magazine
"Value Airline of the Year," Spirit Airlines (SPR) is changing the way leisure flyers approach air travel. In many cases, its main competitors are not other airlines, but the bus or automobile. Spirit Airlines (SPR) was the first ultra low-cost carrier (ULCC) in the USA and it has untapped a demand for a market that wants the very best deal. For some families, (SPR) has provided the first-ever opportunity for them to fly to a vacation destination or to visit relatives rather than spend hours on the road.
News Item A-2: Despite pledges by some USA airlines that they have no plans to lower fares in response to falling fuel prices, one of the country’s largest ultra low-cost carriers (ULCC)s, Spirit (SPR) has refined its 4th quarter (4Q) 2014 margin guidance due to what it deems as fare compression for close-in bookings.
(SPR) also concludes dilutionary pricing is occurring in Dallas, its second largest market by seat deployment and a particularly dynamic market due to the lifting of restrictions on certain long-haul flights from Dallas Love Field that has fueled overall capacity growth in the market.
Spirit (SPR)’s trimming of its projected (4Q) 2014 margins could lead to larger questions about its planned growth and ambitious margin targets. At that point, it is tough to determine if Dallas is just an anomaly in (SPR)’s business logic, or if major airlines are examining how to respond to the new breed of ultra low-cost carriers (ULCC)s.
Spirit (SPR) began rapidly building up a presence in the Dallas market a couple of years ago, prior to the merger of American (AAL) and US Airways (AMW)/(USA) when Dallas’ largest airline, (AAL) was in Chapter 11. (AAL) remains the largest airline at Dallas/Fort Worth (DFW) by a wide margin with roughly 84% of both the system and domestic seats deployed from the airport.
Spirit (SPR) is (DFW)’s second largest airline measured by seats on offer, with a roughly 4% share. (DFW) is the (ULCC)’s second largest base, representing approximately 12% of its seats deployed from its top markets for the week of 29 December 2014 to January 4th 2015.
Part of (SPR)’s logic for re-entering the Dallas/Fort Worth market in 2012 was an opportunity to stimulate traffic in a high fare market dominated by a legacy airline. It was part of (SPR)’s strategy in building up Fort Lauderdale, which is approximately 34 km north of Miami.
(AAL) is also the dominant airline in Miami, which is (AAL)’s largest gateway to Latin America. Spirit (SPR) leveraged the large ethnic population in South Florida to offer fares well below (AAL) to stimulate traffic to the Caribbean and Latin America.
As of November 2014, (SPR) estimated it had the most competitive overlap with (AAL) during (4Q) 2014 of 58%. It has the second highest overlap with Southwest Airlines (SWA) of roughly 49%.
Spirit (SPR)’s higher competitive overlap with the two USA major airlines based in Dallas occurs at a time when capacity is rising at a fast rate in the market, which includes both (DFW) and (SWA)’s headquarters at Dallas Love Field.
With the repeal of the Wright Amendment that limited certain long-haul service from Love Field, (SWA) in late 2014 made a push from the airport, launching nonstop flights to 15 new markets (New York LaGuardia, Baltimore/Washington, Washington National, Chicago Midway, Denver, Las Vegas, Orlando, Atlanta, Fort Lauderdale, Los Angeles, Nashville, Phoenix, Orange County, San Diego, and Tampa.
Data for the week of December 28th 2014 to January 4th 2015 show that (SPR) operates service from (DFW) to several of those markets, including LaGuardia, Baltimore, Chicago (O’Hare), Denver, Orlando, Atlanta, San Diego, and Tampa.
As (SWA) was making its push from Love Field, Virgin America (VUS) also launched service during (2H) 2014 to LaGuardia, Washington National and San Francisco. (VUS) plans to introduce service to Chicago O’Hare (ORD) in 2015.
(VUS) vied for and gained gates at Dallas Love Field that were divested by (AAL) and US Airways (AMW)/(USA) as they sought approval from the USA Department of Justice for their merger. The airlines were also required to divest slots at Washington National, and both (SWA) and (VUS) along with JetBlue (JBL) purchased slots at the airport.
The push by Virgin America (VUS), (SWA) and capacity additions by other airlines at Love Field has resulted in a +46% rise in seats deployed from the airport to North America year-on-year for the week of December 29th 2014. (SWA)’s seats have jumped 35%, and Delta (DAL) and United (UAL) have both ramped up their capacity from the airport by +93% and +56%, respectively.
(DAL) competed against Virgin America (VUS) to gain the Love Field gates, but ended up losing out to the low fare airline. (DAL) has up-gauged its airplanes from Love Field and now operates a mix of Bombardier (BMB) CRJ900s and Boeing (TBC) 717s from the airport. Although both (DAL) and (UAL) have added seats from Love Field during the past year, they still represent a fraction of the seats on offer from the airport to North American destinations. Each airline holds nearly a 2% share from the airport.
They deploy a much higher number of seats from (DFW), and have also increased their seats on offer from that airport to North America during the past year. (DAL)’s seats on offer for the week of December 29th 2014 have increased roughly +13% year-on-year and (UAL)’s have grown by approximately +8%. Overall, seat counts from (DFW) to North America have risen by roughly +5%.
As a result of the new service launches and other capacity increases, Spirit (SPR) recently declared that it had noticed dilutive pricing “arising from the change in capacity related to the expiration of the Wright Amendment." It also explained that since late October 2014, “there has been compression in the fare structure for close-in bookings believed to be driven by the industry’s willingness to trade lower fuel prices for lower fares”.
It is an interesting observation from the self declared low fare leader, and in contrast to declarations by (DAL) that it did not intend to usher in lower fares as a result of falling oil prices. Pricing moves by airlines are being closely watched by investors, which could be spooked by airlines opting to act "irrationally" in light of lower energy costs.
(SPR)’s observations that close-in fares are falling, coupled with pricing pressure in Dallas has led (SPR) to trim its (4Q) 2014 operating margin guidance from 18.5% to 19.5% to a still very respectable 18% - 19%. (SPR) still estimates a 20% operating margin for (1Q) 2015 of 20%, and expects to grow capacity by 30% in 2015.
As 2015 approaches, (SPR) and the industry at large will learn if the pricing action on close-in bookings is temporary, or if it will linger as oil prices remain below historical highs. (SPR) may also need to revisit its (1Q) 2015 margin targets if pricing pressure persists in Dallas.
It is tough to determine if Dallas is indicative of larger challenges (SPR) may face going forward as major airlines become more aggressive in responding to (SPR)’s expansion. (SPR)’s long-held belief is that large legacy airlines essentially leave the airline to its own devices due to the fact that (SPR) targets low-yielding, price conscious travelers.
But during 2014, executives at (AAL) confirmed that the airline does watch Spirit (SPR)’s movements, and during the last couple of years Delta Air Lines (DAL) has opted to offer a basic economy fare in some markets where it competed with (SPR). Four of (SPR)’s top 10 markets based on seat deployment for the week of December 28th 2014 to January 4th 2015 are into (DAL)’s Detroit hub.
(DAL) recently revamped its fare structure to five fare families that include a restrictive basic economy option, main cabin, "Delta Comfort" plus and "Delta One"/First (F) class. The bare bones option is in response to Spirit (SPR)’s business model that entails offering low basic fares and charging for nearly every other aspect of the travel experience.
(SPR) has previously explained that it can take some pressure on unit revenues if its costs remain low and margins stay high as its capacity growth for 2015 has raised some concerns among investors. On a unit cost basis, (SPR) performed better than its expectations in (3Q) 2014 and projects unit costs, excluding fuel in (4Q) 2014 of USD5.78 cents to USD5.84 cents compared with USD5.91 in (4Q) 2013.
(SPR)’s ability to keep its fares low, depends on keeping its costs in check, and it seems (SPR) continues to perform well in that metric.
But it is tough to determine when (SWA) and Virgin America (VUS) will start to taper off their introductory fares into new markets, and how the management team at (AAL) will ultimately handle (SPR)’s presence in Dallas. (SPR) could experience some unit revenue pressure for the foreseeable future; but for the moment, it seems its cost performance should offset most of the headwinds.
Spirit (SPR) ended 2014 with an interesting set of market dynamics in its second largest base and in the USA domestic industry overall, as some airlines appear to be going against investor sentiment and adjusting at least a portion of their pricing to lower fuel costs, perhaps to deflect pressure from USA legislators, who have requested an investigation into the reasons fares are not falling faster.
As (SPR) gears up for highly ambitious capacity growth in 2015, (SPR) may also find itself facing the largest challenge yet to its business model, that up to this point has escaped direct attacks from the legacy airlines. Maintaining a substantial cost margin will be key to its success, but it has some big adversaries who can be destructive, if they become sufficiently irritated.
February 2015: News Item A-1: "Spirit Airlines (SPR) 2014 Net Profit up +27.4% to +$226 million" by Mark Nensel (ATW) February 10, 2015.
Fort Lauderdale, Florida based ultra-low-cost carrier (LCC) Spirit Airlines (SPR) posted its eighth consecutive year of profitability in 2014, with net income of +$225.5 million, up +27.4% over 2013’s net profit of +$176.9 million.
(SPR)’s 2014 operating revenue grew +16.8% year-over-year to $1.93 billion as expenses increased +14.9% year-over-year (YOY) to $1.58 billion, resulting in an operating profit of +$355.3 million, up +25.8% (YOY).
(SPR)’s full-year passenger traffic grew +18% (YOY) to 14.2 billion (RPM)s as capacity kept pace with +17.9% (YOY) growth to 16.3 billion (ASM)s. Total passenger load factor for 2014 came to 86.7% LF, up +0.1 point from 2013. (SPR)’s full-year (RASM) was down -1% to 11.82¢ and (CASM) excluding fuel was 5.88¢, down -0.5% (YOY). (SPR)’s full-year yield decreased -1.1% (YOY) to 13.64¢.
(SPR) is targeting a 24% - 29% operating margin in 2015, “given the current demand environment, pricing trends [and] fuel costs,” Spirit (SPR) (CEO), Ben Baldanza said. “We are a uniquely different airline,” he added. “We run our business differently than other USA airlines. We target different customers. We are growing at a faster rate than others and we target higher returns.”
(SPR)’s growth strategy for the next five years concentrates on fleet growth and network consolidation. “We still believe investing in our business is the best use of our cash,” Baldanza said, adding, “It’s more connecting dots rather than adding more dots on the map.”
(SPR) took delivery of 11 Airbus A320ceo airplanes in 2014, seven of which came in the fourth quarter, and (spr) ended the year with 65 total airplanes in its fleet (34 A320ceos; 29 A319s; two A321ceos), a +20.4% increase in its fleet size in one year.
(SPR)’s fleet plan for 2015 calls for eight new A320ceos to be delivered by the end of 2015 second-quarter, plus six A321ceos and a single A320neo to be delivered during the latter half of the year, finishing out 2015 with 80 airplanes, a further fleet expansion of +23%. (SPR) is aiming for a total fleet of 144 airplanes by the end of 2021, nearly tripling its fleet size in eight years. (SPR) created over >600 new positions in 2014, bringing its employee count to 4,388 as of December 31, up +23.8% (YOY).
(SPR)’s 2014 total revenue per passenger flight segment was $135.14, up +1.4% (YOY); average base ticket price revenue per passenger flight segment was $80.11 (up +0.9% (YOY)) and average non-ticket (ie, ancillary) revenue per passenger flight segment was $55.03 (up +2.2% (YOY)).
(SPR)’s fourth-quarter net profit was +$55.9 million, up +29.4% from (SPR)’s fourth-quarter 2013 net income of +$43.2 million. Operating revenues in the December quarter were $474.5 million, up +13% (YOY); operating expenses came to $384.5 million, up +9.3% (YOY), resulting in $90 million in operating income, up +32.2% from Spirit (SPR)’s fourth-quarter 2013 operating profit of +$68.1 million. Fourth-quarter total revenue per passenger flight segment was $127.91, down -3.7% (YOY); average base ticket price revenue per passenger flight segment was $73.21 (down -6.1% (YOY) and average ancillary revenue per passenger flight segment was $54.70 (down -0.3% (YOY)).
News Item A-2: Spirit Airlines (SPR) expanded its presence at Cleveland (CLE) with the addition of three new routes on February 5th, all of which are served daily using (SPR)’s 145-seat A319s. Firstly, (SPR) introduced operations on the 1,643 km airport pair to Dallas/Fort Worth (DFW), a route already flown by American Airlines (AAL) (thrice-daily) and United Airlines (UAL) (11 times weekly) and Frontier Airlines (FRO) (weekly). Secondly, (SPR) the low cost carrier (LCC) started flights to Fort Lauderdale (FLL) and Las Vegas (LAS), both of which are already served by (UAL) (12 times weekly) and (FRO) (daily). This brings to six the number of destinations now served by (SPR) from Cleveland, having launched its first flights from the airport to Orlando, Southeast Florida and Tampa in mid-January.
March 2015: News Item A-1: Spirit Airlines (SPR) is confident it can compete effectively with Frontier Airlines (FRO) in Atlanta, while not taking too much share from Delta Air Lines (DAL), a (SPR) executive said.
For (DAL), (SPR) is relying upon a familiar argument (that a legacy carrier can’t compete with an ultra-low-cost carrier (ULCC)). In a recent presentation to investors, (SPR) estimated (DAL) has an adjusted cost per available seat mile (CASM) that is +59% higher than (SPR)’s. “Do they want to lose money to drive a competitor out?” (SPR) VP Network Planning, Mark Kopczak asked. “That’s a very difficult decision.”
(SPR) had long considered an Atlanta expansion, calculating that the Southwest Airlines (SWA) acquisition of AirTran Airways (CQT) was increasing fares. What it may not have expected, however, was that Frontier Airlines (FRO) would try the same approach at the same time. (SPR) will soon add nine routes at Atlanta, while (FRO) will add 10.
Kopczak said less about (FRO), noting that ultimately, the “consumers will make the decision,” regarding which (ULCC) they prefer, especially on routes on which the two carriers overlap, such as from Atlanta to Los Angeles and Cleveland. But Spirit (SPR) is believed to retain a slight cost advantage over (FRO).
Even though (DAL) has created a new low-fare class with few perks in an attempt to compete with (ULCC)s, Kopczak predicted legacy carriers will eventually focus on high-yield passengers, allowing (SPR) some room to thrive. “The product they built is about catering to the corporate business model,” he said. He called (DAL) and (SPR) “complementary” airlines who won’t necessarily steal share from each other. “It’s not like we are going in with huge amount of capacity,” Kopczak said.
Investment analysts have generally bought that argument, and with (SPR) planning to take delivery of 15 Airbus A320-family airplanes this year, many investors remain bullish on the company and its growth opportunities. Spirit (SPR) “stimulates lower-yielding traffic that network carriers have essentially abandoned following consolidation,” Credit Suisse said in a recent report.
News Item A-2: Spirit Airlines (SPR) begins daily Atlanta service: Cleveland, Las Vegas and Orlando May 7; (BWI), Philadelphia and Tampa June 18; Los Angeles August 20 and Boston, Fort Myers (seasonal) September 10.
News Item A-3: "March Madness: Southwest vs Spirit" by Aaron Karp in AirKarp Blog, March 23, 2015.
Many Americans spent the last four days obsessed with “March Madness,” the moniker given to the annual National Collegiate Athletic Association basketball tournament in the USA featuring 48 televised games over about 85 hours. Basketball fans watching the smorgasbord of games repeatedly saw a new commercial for Southwest Airlines (SWA), one of the tournament’s primary sponsors. The commercial caught my attention because, for the first time, (SWA) appears to be targeting ultra-low cost carrier (ULCC) Spirit Airlines (SPR).
(SPR) maintains (and (SWA) in the past has concurred) that it is not stealing passengers from (SWA) or any other airline, but rather is creating new passengers with its no-frills product in which fares are kept very low, while fees are added for nearly all services. Speaking earlier in March at the (ISTAT) Americas 2015 conference in Phoenix, Spirit (SPR) (CFO), Ted Christie talked about the fast-growing Florida-based (ULCC)’s “price aggressive” business model.
“There’s demand today at our price point, it’s just that no one [else] serves it,” he said. “The people we carry, were there the day before we entered the market, it’s just that fares [on other airlines] were too high for them. We’ve fully unbundled the product and allowed our customers to pay for exactly what they want. The data suggests that on average we’re around 30% - 40% cheaper than the comparable fare in the markets we serve, even when you take into account the [ancillary] options you add.”
Whereas Southwest (SWA) blankets popular televised sports with ads, Spirit (SPR) focuses much of its marketing on Internet campaigns featuring puppets, disrobing passengers and the occasional double entendre. And (SWA)’s ads previously focused either on (SWA) itself or differentiating (SWA) from legacy USA airlines like American (AAL), Delta (DAL), and United (UAL). The new (SWA) ad doesn’t directly mention (SPR), but it’s unmistakable to which airline it is referring.
“We invented low fares,” (SWA) reminded basketball viewers in the commercial. “Then everyone else pretty much tried to follow. We call it the "Southwest effect." But other airlines probably use more colorful language. Low fares. We don’t just have them, we invented them.”
The “more colorful language” reference (accompanied by one smiling (SWA) employee rolling her eyes and another shrugging her shoulders) is clearly a shot at Spirit (SPR).
Why is (SWA) suddenly worried about Spirit (SPR)? Well, (SPR) is growing aggressively (its capacity will rise +30% year-over-year in 2015) and (SPR) is increasingly becoming an alternative in many markets (SWA) serves. And while (SPR) is definitely creating new passengers, perhaps (SWA) is worried that its existing low-end leisure passengers could be starting to bleed to (SPR). Also, while (SWA) more and more targets business (C) passengers, it does not want to lose its signature brand recognition in the USA as THE low fares airline: “Low fares. We don’t just have them, we invented them.”
The frenzy that is the four days of "March Madness" in which 64 teams are dramatically and quickly paired down to 16 has become beloved for, above all else, big upsets in which an established, powerhouse university loses unexpectedly to a scrappy, unknown upstart school. Often, these upsets occur because the well-known team doesn’t take its opponent seriously enough until, suddenly, it is late in the game and the underdog has too much momentum to be overcome. (SWA) does not want to be “upset” by (SPR) because it does not take its lesser known, smaller rival seriously enough. (SWA)’s March Madness ad campaign, to me, is the first signal that (SWA) does see (SPR) as a potential threat that needs to be taken seriously.
April 2015: News Item A-1: Spirit Airlines (SPR) earned net income of $69 million in the first quarter, up +83% over a net profit of +$37.7 million in the 2014 March quarter, as it grew capacity aggressively.
Spirit (SPR)’s capacity rose +25% year-over-year in the first quarter and is set to grow +32% in the second quarter, +30% for the full year and +20% to +22% in 2016. “We feel really good about the rest of the year,” (CEO), Ben Baldanza told analysts. “We feel good about the growth.”
He conceded that the fast rate of growth had hurt Spirit (SPR)’s revenue performance, but noted that (SPR) was more than making up for it on the cost side (first-quarter (RASM) was down -9.9% year-over-year to 10.43 cents, while (CASM) lowered -18.7% to 8.12 cents). “The (CASM) benefit is greater than the (RASM) hit,” Baldanza said. “We’re margin focused. Our margins are getting better and that would indicate this is a pretty good year.”
Spirit (SPR)’s first-quarter pre-tax margin was 22.1%, up +8.4 points year-over-year. “You’ve not seen our (RASM) drop -10%” in the past, Baldanza acknowledged. “But those were higher fuel [cost] periods and lower growth periods. The revenue hit from our growth is more than offset by the cost good guy.”
(SPR)’s first-quarter revenue increased +12.6% year-over-year to $493.4 million, while expenses rose +1.6% to $384.1 million, producing operating income of +$109.3 million, up +82.2% over an operating profit of +$60 million in the 2014 March quarter. First-quarter airplane fuel costs decreased -24.3% to $112.4 million.
(SPR)’s first-quarter traffic increased +22.1% year-over-year to 4.02 billion (RPM)s on the +25% rise in capacity to 4.73 billion (ASM)s, producing a load factor of 84.9% LF, down -2 points. Yield fell -7.8% to 12.28 cents.
(SPR) took delivery of five new Airbus A320s during the first quarter, ending the period with 70 airplanes in its fleet.
News Item A-2: Spirit Airlines (SPR) begins daily, Latrobe/Pittsburgh (LBE) - Chicago (ORD) on May 7.
A320-232 (6586, N642NK), ex-(F-WWDV) delivery.
June 2015: News Item A-1: Spirit Airlines (SPR) launched three routes from Atlanta (ATL) on June 18 to Baltimore/Washington (BWI), Philadelphia (PHL) and Tampa (TPA). All services will operate daily using (SPR)’s A319s, and all face strong direct competition, most notably from Delta Air Lines (DAL), which serves all three city pairs with multiple-daily frequencies. The new services mean that (SPR) now operates to 12 destinations from Atlanta, with further routes to Boston, Los Angeles and Fort Myers being launched later this year.
News Item A-2: Ultra-low cost carrier (ULCC), Spirit Airlines ((IATA) Code: NK; (ICAO) Code: NKS) (SPR) has added its new deep yellow and bold black lettering (which until now had only been applied on its A319 fleet) to its first A320. A320-232 (4595, N607NK) (see photo - - "SPR-A320-232 - The Yellow Cab, 2015-06.jpg) and it is one of the 40 A320s currently in (WJE)'s fleet. This new color scheme is evocative of the famous 1970's livery of Hughes Airwest (IATA) Code (RW)), once known as the "Top Banana In The Sky."
July 2015: News Item A-1: Spirit Airlines (SPR) posted second-quarter net income of +$76.7 million, up +18.3% over a net profit of +$64.8 million in the 2014 June quarter, and said it will make no changes to its business strategy despite “very aggressive” moves by mainline USA airlines to match its low fares.
“In 2015, we have seen a return to a pre-consolidation [US airline] pricing market,” (SPR) (CEO), Ben Baldanza said mainline USA carriers are carrying low-fares passengers “to cover excess capacity.” As a result, (SPR)’s average ticket revenue per flight segment was down -19.4% year-over-year in the second quarter to $68.35.
The Florida-based ultra-low-cost carrier (ULCC), (SPR), which had previously warned that its earnings would be hurt by severe weather that occurred in June, reported second-quarter revenue of $553.4 million, up +10.8% year-over-year, and expenses of $431.1 million, up +9.4%. Operating income of $122.3 million increased +16.3% over an operating profit of +$105.1 million in the prior-year quarter.
Baldanza said there is “very little overlap” in terms of passengers carried between major USA network carriers and Spirit (SPR), adding that (SPR) would press ahead with its fast-paced growth plan, even as more airlines look to match its low fares. “The overlap between us and them is just not that large, though of course there is some overlap,” he said. “We would have had a much worse year this year, if we hadn’t grown. We’re pushing (CASM) down with that growth.”
American Airlines (AAL) President, Scott Kirby said (AAL) is “all-in now in matching ultra-low cost carriers (ULCC) everywhere,” adding, “We’ve won back some market share, we had lost by not being price competitive.”
Baldanza maintained the current pricing environment in the USA “does not really bother us. If this environment stays for a while, then we’ll be OK.” But he acknowledged the pricing actions of other USA airlines were responsible for 40% of (SPR)’s 14.8% second-quarter year-over-year (RASM) drop to 10.62 cents.
“We’ve got a generally smart industry run by generally smart people,” Baldanza said. “It’s a very aggressive environment right now, and that environment is why we’re operating 21% to 23% margins and not higher.”
News Item A-2: Spirit Airlines (SPR) said it took a -$20 million hit in the second quarter owing to “adverse weather.”
(SPR) won’t release its June quarter earnings results until July 24, but it has warned in a filing with the USA Securities & Exchange Commission (SEC) that weather-related flight delays and cancelations will lower second-quarter revenue by -$5 million and increase costs by +$15 million.
A series of storms at key airports “produced a domino effect on our operation resulting in over >500 flight cancelations and numerous flight delays” during the second quarter, (SPR) said in the (SEC) filing, adding, “Due to the sheer volume of flights affected, we were unable to flex up our staffing levels enough to mitigate the impact of crews being displaced or timing out, which lengthened the span of the irregular operation and the time it took to restore our system to normal.”
(SPR) had said in April that full-year 2015 (CASM), ex-fuel would be down -6% to -8% compared to 2014. But (SPR) has now revised that guidance, projecting that (CASM), ex-fuel, will be down just -4.9% to -5.9% for the full year.
It may be difficult to make up for the higher costs on the revenue side because (SPR) said in the (SEC) filing that the USA domestic pricing environment has “softened further, including for travel in the peak summer periods, due to competitor pricing actions.”
Fast-growing (SPR) still expects to increase full-year capacity by +30% over 2014, according to the (SEC) filing.
News Item A-3: Lufthansa Technik (DLH) (LTK) begins maintenance work on its first aircraft from Spirit Airlines (SPR) at its newly opened location in Puerto Rico on July 21.
August 2015: Spirit Airlines (SPR) launched services between Los Angeles (LAX) and Atlanta (ATL) on August 20. The 3,124 km sector will be flown by (SPR) daily using its A319s, and faces strong competition from Delta Air Lines (DAL) (82 weekly flights), Southwest Airlines (SWA) (20), American Airlines (AAL) (19) and Frontier Airlines (FRO) (7). The launch means that Atlanta becomes the 12th destination to be served by (SPR) from Los Angeles.
September 2015: Spirit Airlines (SPR) commenced two new routes from Atlanta (ATL) on September 10 to Boston (BOS) and Southwest Florida (RSW). Both sectors will be operated daily using (SPR)’s A319s. The 1,519 km sector to Boston will face direct competition in the form of Delta Air Lines (DAL) (74x-weekly flights) and Southwest Airlines (SWA) (14x). The 829 km sector to the Floridian airport will also face competition from the same carriers, (DAL) (51x) and (SWA) (14x). Spirit (SPR) begins Los Angeles - Oakland on November 12. (SPR) also adds daily, New Orleans - Las Vegas service on November 13.
October 2015: News Item A-1: "Spirit 3Q Net Profit up +44%; Stays Course Despite Stock Drop" by (ATW) Aaron Karp, October 27, 2015.
Spirit Airlines (SPR) earned third-quarter net income of +$97.1 million, up +44% over a net profit of +$67 million in the 2014 September quarter, and vowed to maintain a high growth rate in the face of stiff pricing pressure.
(CEO), Ben Baldanza confronted tough questioning from Wall Street analysts during an October 27 conference call as ultra low-cost carrier (ULCC) (SPR)’s revenue performance struggles amid aggressive moves by American Airlines (AAL) and other competitors to match its low fares. Spirit (SPR)’s stock price hit a 52-week low of $33.80 October 27, down -60.4% from December 2014. Baldanza said (SPR), which will grow capacity +30% year-over-year for the full year 2015 and plans to grow (ASM)s another +20% in 2016, will stay the course with an eye towards the long-term future of the company.
“We have avoided knee-jerk gyrations and reactions to current conditions” in the past, and will continue to do so, he said, adding, “Absolutely, we’re earning at a lower rate right now, because of lower prices in our markets than we were, when the prices were higher. But that doesn’t suggest that there’s a lot more money to be made by just wholesale pulling up a large chuck of the operation and putting it somewhere else. We’re building the network for the long-term. We’re frustrated obviously that the company has lost half its value in the stock drop. But we believe the way to address that, is by running a really good company, making smart decisions and building the long-term franchise.”
Baldanza pointed to (SPR)’s overall earnings performance, which continues to be strong.
Third-quarter operating revenue rose +10.6% to $574.8 million, while expenses decreased -0.5% to $417.6 million, producing an operating profit of +$157.2 million, up +56.9% from operating income of $100.2 million in the prior-year period.
(SPR)’s third-quarter traffic increased +30.4% year-over-year to 4.77 billion (RPM)s on a +34.1% increase in capacity to 5.6 billion (ASM)s, producing a load factor of 85.2% LF, down -2.4 points. (RASM) lowered -17.5% to 10.27 cents and yield dropped -15.2% to 12.05 cents. Baldanza said 60% of the (RASM) decline can be attributed to pricing pressure from competitors. Average ticket revenue per passenger segment fell -20.8% year-over-year in the third quarter to $66.96.
“Are we reacting to this environment? Yes, of course we are,” Baldanza said. “However, we believe it is in the best interest of our shareholders to use a scalpel versus a chainsaw. Our costs are lower than ever [third-quarter (CASM) ex-fuel was down -9% to 5.39 cents]. Our planes are full even with others matching our fares more aggressively. In a low price revenue environment, it’s good to be the 5 cent (CASM) ex-fuel guy.”
News Item A-2: "American (AAL) Takes Spirit Seriously" by (ATW) Aaron Karp in AirKarp Blog, October 23, 2015.
The notion that ultra low-cost carrier (ULCC) Spirit Airlines (SPR) isn’t taking passengers away from major USA airlines and isn’t in direct competition with them (promulgated by both Spirit (SPR) and major USA carriers in the past) is no longer germane. (AAL) President, Scott Kirby has made clear that (AAL) considers (SPR) a very serious competitor and, in fact, is planning to roll out a new fare model next year primarily to enable it to better compete against (SPR) and other USA (ULCC)s.
First, some pretty amazing numbers, Kirby revealed in (AAL)’s third-quarter earnings conference call:
* 87% of people who flew (AAL) in the last year, were flying on (AAL) for the only time they would fly it during that year. Those passengers represent about 50% of (AAL)’s revenue.
* 28% of (AAL)’s domestic capacity overlaps with (SPR)’s. 11% of (AAL)’s domestic (ASM)s overlap with (ULCC) Frontier Airlines (FRO)’s.
* Spirit (SPR) operates 50 flights a day from Dallas/Fort Worth (DFW) and is (AAL)’s number two competitor at (DFW). (SPR) is (AAL)’s number three competitor at Chicago O’Hare (ORD).
* For several reasons, most importantly because (AAL) is carrying a lot of connecting traffic, while (SPR)’s passengers are mainly flying point-to-point, one (SPR) flight is the equivalent of three (AAL) flights in terms of passengers carried.
Kirby believes that those 87% of passengers who only fly (AAL) once a year (the infrequent flyers, if you will) view flight tickets as a commodity and simply want the lowest fare. Therefore, these passengers generally have no qualms about flying (SPR) instead of (AAL). As a result, (AAL) is matching (SPR)’s and (FRO)’s fares all over the country, and believes it has no choice but to do so.
“When 50% of our revenue is up for grabs, we have to compete,” Kirby said. “We can’t just walk away. We know that we have to match their fares. This isn’t something unique to (ULCC)s. We match Delta (DAL), we match United (UAL), we match Air France (AFA). If we’re going to fly head-to-head, we need to match their fares.” Kirby said (AAL) operates higher load factors on the routes, where it is matching (ULCC)s, which helps make up for the low fares on the revenue side.
Kirby did not give details, but said (AAL) is working on a new fare structure to be rolled out sometime in 2016 with the explicit purpose of countering (ULCC)s, which offer very low base fares and then charge fees for nearly everything. (AAL) will “dis-aggregate the product and offer fares with a greater suite of attributes, that allows (AAL) to really compete with the low-cost carriers (LCC),” he said.
I noted in March that Southwest Airlines (SWA) was running a television ad targeting Spirit (SPR), treating the (ULCC) as a legitimate rival. Kirby’s comments are the most explicit I’ve heard from a major USA airline executive, indicating (SPR) is being taken seriously and viewed no differently as a competitor than, as Kirby said, (DAL), (UAL) or (AFA).
The question now is how will (SPR) and (CEO), Ben Baldanza respond? “We’re carrying different customers than (DAL) or (SWA) is carrying,” Baldanza has said in the past. “In general, our decision about where to fly is about how much new traffic we can generate with our lower fares, not about how much traffic we can take away from X, Y and Z.” But with X, Y and Z now aggressively trying to take traffic away from (SPR), can Baldanza afford to maintain that posture?
November 2015: "Spirit (SPR) Explores Wi-Fi, but Only if it Bears No Cost" by (ATW) Brian Sumers, November 11, 2015.
Spirit Airlines (SPR) is interested in adding onboard Internet, but only if a connectivity company installs and operates it at no cost to (SPR).
The three USA ultra low-cost carrier (ULCC)s have avoided adding Wi-Fi, betting it is more important to keep costs low than offer passengers a choice. But with Internet now ubiquitous (even many budget-minded travelers expect to be connected at all times, if only to access Netflix subscriptions or email) Spirit (SPR) is exploring Wi-Fi, spokesman Paul Berry said.
“We have issued a challenge to onboard Wi-Fi companies,” Berry said. “If they can install the Wi-Fi unit and they are willing to cover all the additional costs, we’d be willing to give them all the revenue they receive from Wi-Fi sales.” Berry said some companies have expressed interest, but he said it is too early for the airline to decide how it will proceed.
Thus far, Berry said Spirit (SPR) has not added Wi-Fi for two reasons: First, (SPR) does not want to take an aircraft out of service for hardware installation. And second, (SPR) has decided that carrying additional weight is not worth it.
With the systems now used by most airlines, Berry argued customers pay twice: once as part of their ticket prices to subsidize the system, and again for the actual Wi-Fi. “Spirit (SPR)’s business model is our customers should only pay for the products and services they use,” he said.
Berry questioned how many travelers would use the system. When it is fast and free (as on JetBlue (JBL)’s Airbus A321s, A320s and some Embraer EMB-190s) the take-rate can be massive. On some flights, especially transcontinental ones, (JBL) is seeing more connected devices than passengers on board, according to (JBL) VP Brand & Product Development, Jamie Perry.
But Spirit (SPR)’s Internet would not be free, so Gogo is probably a more appropriate comparison. In the first nine months of the year, Gogo’s take-rate across all of its North America airlines was 6.2%, according to its most-recent quarterly report. “[The take-rate is] very, very low (at least from what vendors are telling us),” Berry said. Still, even considering Wi-Fi is a step forward for (SPR).
The two other USA carriers with a similar model (Colorado-based Frontier Airlines (FRO) and Las Vegas-based Allegiant Air (WJE)) say they have no plans to explore Internet connectivity. “The demand is not there to justify the investment and increased cost,” (WJE) spokeswoman, Jessica Wheeler said. In addition to the ultra-(LCC)s, another larger USA carrier does not have Internet. Hawaiian Airlines (HWI) has “no plans” to change its Wi-Fi strategy, a spokeswoman said. While most USA airlines may cling to the pay-for-use model as long as they can, JetBlue (JBL)’s Perry questioned how long his competitors can hold out. For now, (JBL) is the only USA carrier that has promised customers free Internet for longer than a short trial period.
“People are consuming more and more data, and people are less willing to pay a lot of money for Internet access,” he said. “They expect it to be high-powered, reliable and free. I do not think the airline industry can hold out against those two trends for long.”
A321-231 (6867, N661NK), EX-(D-AVXQ) delivery.
December 2015: News Item A-1: Spirit Airlines (SPR) is to add 2 new cites from Atlanta, including daily to Minneapolis-St Paul on April 14, 2016, and New Orleans.
News Item A-2: Baggage fees revenues for USA airlines in (3Q) 2015 rose +6.2% year-over-year, to $1.02 billion, according to the USA Bureau of Transportation Statistics (BTS). It is the 1st time 3rd quarter baggage fee revenues have surpassed the $1 billion threshold.
In contrast, reservation cancellation/change fees revenues for the 11 major USA reporting airlines plus two other carriers (Sun Country Airlines (SCA) and Island Air Hawaii) were down -0.4% year-over-year (YOY), to $755.2 million.
In figures released December 15 by the (BTS), a USA Department of Transportation agency, American Airlines (AAL)’s (3Q) revenue figures in both categories reflected the consolidation of its reporting following its merger with US Airways (AMW)/(USA), with extreme (YOY) boosts in revenue: for baggage fees, (AAL)’s revenue grew +88.5% (YOY), while for reservation cancellation/change fees, its revenue grew +51.7% (YOY). Looking more closely, however, if the (3Q) 2014 revenues from both airlines are combined and contrasted to the consolidated (AAL) (3Q) 2015 revenue, the (AAL)'s (YOY) changes are more realistic, with baggage fee revenue rising +3.9% (YOY), and reservation cancellation/change fee revenue falling -2.7% (YOY).
For 3rd-quarter baggage fee revenues, after American Airlines (AAL)’s $292.1 million in revenue, Delta Air Lines (DAL) earned the most, with $236.9 million in revenue, virtually flat with its (3Q) 2014 total. United Airlines (UAL) was next, with $184.7 million in revenue, up +2.2% (YOY).
4 of the 5 reporting low-cost-carriers (LCCs) showed remarkable jumps in (3Q) 2015 baggage fee revenue. JetBlue Airways (JBL) reported $42.7 million in (3Q) baggage fee revenue, up +86.6% from $22.9 million in (3Q) 2014. Allegiant Air (WJE), Spirit Air Lines (SPR) and Frontier Airlines (FRO) all saw (YOY) baggage fee revenue growth of +25.2%, +23.5% and +22.6%, respectively. Virgin America (VUS)’s (3Q) baggage fee revenue fell -1% (YOY).
Southwest Airlines (SWA) reported a -34.9% (YOY) drop in baggage fee revenue, earning $11.5 million during the September quarter (compared to $17.7 million in (3Q) 2014). (SWA)’s baggage policy allows two checked pieces of baggage per customer. Excess baggage on (SWA) starts at $75 per item one-way.
(DAL) brought in the most revenue for reservation cancellation/change fees during the third quarter with $230.9 million, up +2.1% (YOY). Following (AAL)’s $217 million in revenue, (UAL) reported $202.2 million in revenue, down -4.2% (YOY).
Low Cost Carriers (LCC)s (FRO) and (WJE) both had notable increases in revenue for reservation cancellation/change fees during the quarter. (FRO)’s revenue was up +41.2% (YOY) to $9.3 million, while (WJE)’s was up +31.7% (YOY) to $2.7 million. Minneapolis-based, Sun Country Airlines (SCA) reported reservation cancellation/change fees revenue of $3.8 million during the quarter, >5 times what the airline earned in (3Q) 2014.
News Item A-3: "Orlando International Airport Is Having Another Record Year" December 19, 2015.
>38 million passengers passed through Orlando International Airport in the past year, making it the busiest year ever for the airport.
News Item A-4: Spirit Airlines (SPR) (CEO) Ben Baldanza has called Delta Air Lines (DAL)’S basic economy (Y) fare an example of “good creative management,” saying (DAL)’s strategy makes it “hard for us to grow in their markets.”
News Item A-5: Spirit Airlines (SPR) appointed Lania Rittenhouse as VP In-flight Experience, effective December 1. She is formerly VP Product Development at Carnival Cruise Line and VP Hotel Operations at Norwegian Cruise Line. Most recently, Rittenhouse served as President of FleetPro Ocean, a leading independent passenger ship management company.
January 2016: News Item A-1: "Spirit Airlines (SPR) (CEO) Ben Baldanza Replaced by Former AirTran (CQT) (CEO) Bob Fornaro," by (ATW) Aaron Karp, January 5, 2016.
Spirit Airlines (SPR) President & (CEO) Ben Baldanza has been replaced by former AirTran Airways (CQT) (CEO) Bob Fornaro, effective immediately.
Ben Baldanza led (SPR) since 2006, overseeing (SPR)’s transformation into a rapidly growing and consistently profitable ultra low-cost carrier (ULCC). (SPR) maintained profitability, as it grew capacity by +30% in 2015, but its revenue performance was sluggish throughout the year as major USA airlines began aggressively matching its low fares. Consequently, Wall Street had soured on the company: (SPR)’s stock price, which dipped to as low as $33.80 in October, started trading on January 5 at $39.46, down -46.9% compared to the same date last year.
“Following the tremendous growth and success of (SPR) over the last 10 years, the board [of directors] and I have concluded that this is the right time to implement an orderly succession plan,” Baldanza said January 5. “Bob is the right choice to lead the company through its next phase of growth.”
Though Baldanza referenced a “succession plan,” it had not been previously announced. (SPR) said that Baldanza recently moved his family from Florida to the Washington DC-area.
Ben will receive US$1 million divided into monthly payments over the next 2 years and he will consult for (SPR) for 1 year. His annual salary at (SPR) had been US$500,000 as negotiated in a contract signed in January of 2014. In addition, he will have the right to a bonus for 2015 performance, as well as >30,000 shares of restricted stock that will vest prior to the end of 2016. He will not have access to any additional shares that vest after 2016.
Ben's replacement Robert L Fornaro comes in with a US$550,000 annual salary, a US$30,000 signing bonus, and 70,188 restricted stock units, as well as an equal amount of performance share units tied to how Spirit (SPR) competes with its peers. He will receive pay through the end of 2018 if he leaves or is fired without cause.
Both men will end up with free flights for life on Spirit (SPR) for themselves, their spouses and dependents.
Fornaro led low-cost carrier (LCC) AirTran (CQT) from November 2007 until (CQT)’s May 2011 acquisition by Southwest Airlines (SWA). He has been a member of (SPR)’s board of directors since May 2014.
H McIntyre Gardner, the non-Executive Chairman of (SPR)’s board of directors, said the board has “full confidence that [Fornaro] is the right leader to deliver on the next phase of (SPR)’ growth story,” adding that “Bob has been a passionate supporter of (SPR)’s business model and strategy.”
Fornaro said, “Spirit (SPR)’s focus will remain delivering a customer-friendly product and providing the lowest total price to the places (SPR) flies to. I look forward to working with the rest of (SPR)'s management team and team members to grow the company’s proven ultra low-cost model and drive value for all of Spirit (SPR)’s stockholders.”
News Item A-2: Spirit Airlines (SPR) commenced operations between Baltimore/Washington (BWI) and Orlando (MCO) on January 7. (SPR) will serve the 1,268 km sector with a daily rotation with its fleet of A319s. The route will face direct competition from Southwest Airlines (SWA) (65x-weekly) and JetBlue Airways (JBL) (daily flights). With the launch of Orlando services, Spirit Airlines (SPR) now serves a total of 10 routes from Baltimore/Washington, with destinations 11 and 12, Boston and Detroit, planned to be launching on April 21.
February 2016: News Item A-1: Spirit Airlines (SPR)’s 2015 net profit of $317.2 million was up +40.7% over net income of $225.5 million in 2014, but the ultra low-cost carrier’s (ULCC) new (CEO) acknowledges that operational performance needs to improve.
Former AirTran Airways (CQT) (CEO) Bob Fornaro took over in January as Florida-based Spirit (SPR) President & (CEO), replacing Ben Baldanza after (SPR)’s stock lost half its value in 2015, when it grew capacity +30% year-over-year. Fornaro told analysts during a February 9 conference call that he does “not feel a need to make sweeping changes,” but he conceded that “some of the criticism we’ve received is warranted.”
In particular, Fornaro and (CFO) Ted Christie said (SPR)’s on-time performance has been inconsistent, giving (SPR) a poor reputation among passengers regarding operational reliability. “If we don’t find a way to make us more reliable, we will continue to fall behind,” Fornaro said. “We have something good going on here (the cost structure is fantastic). But what we need to provide is a seamless, more efficient operating experience for the customer Reputation does matter. Some of the things that you say are basics, we need to make happen every day. We need to make air travel uneventful and even a positive experience.”
(SPR)’s 2015 revenue was up +10.9% year-over-year to $2.14 billion, while expenses lowered -3.6% to $1.58 billion, producing operating income of $509.1 billion, up +43.3% over an operating profit of +$355.3 million in 2014.
(SPR)’s 2015 traffic rose +27.1% year-over-year to 18 billion (RPM)s on a +30% increase in capacity to 21.25 billion (ASM)s, producing a load factor of 84.7% LF, down -2 points. Yield dropped -12.8% to 11.9 cents as (SPR) faced competitive pricing pressure from major USA airlines.
Fornaro said (SPR) will continue to be a high-growth carrier going forward, but will not grow as fast as it did in 2015. “We do not expect to repeat a +30% growth rate in the future, but we are comfortable with a +15% TO +20% [annual growth] range,” he explained. “I fully expect and support (SPR) being a high-growth carrier for the foreseeable future.”
Fornaro said he is “much more open to a broader view of routes” than Spirit (SPR) has had over the last several years, when it mainly focused on serving big hubs and competing head-to-head with major USA carriers on routes. “Over time, we will be just as interested in looking at midsize markets and small markets to leisure destinations routes,” he said.
News Item A-2: Spirit Airlines (SPR) has tweaked its baggage policy to waive fees for active duty USA military personnel.
The ultra low-cost carrier (ULCC) has long made bag fees (both checked and carry-on) a key part of its low-base fare, fee-heavy pricing model. But new President & (CEO) Bob Fornaro has vowed to improve Florida-based (SPR)’s customer-service reputation, and the policy change for military personnel baggage is the 1st public example of those efforts.
Effective immediately, Spirit (SPR) is allowing all passengers with an active military (ID) to check 2 bags for free. It will also not charge military personnel a fee for a carry-on bag. (SPR) said it will refund bag fees already purchased by military personnel for upcoming trips. “This is the right thing to do and the right time to implement this change,” Fornaro said.
If paid when booking a flight, (SPR)’s standard bag fees are $35 for a carry-on bag, $30 for the 1st checked bag and $40 for the 2nd checked bag.
March 2016: "USA Carriers File Applications to Start Scheduled Flights to Cuba" by (ATW) Editor Karen Walker, March 2, 2016.
All four USA major carriers and at least 3 independents filed applications with the USA government March 2, seeking approval to provide non-stop services to Cuba.
The flood of filings, submitted March 2, come after the USA and Cuba announced an agreement in February to resume scheduled commercial air service. Services are expected to begin late summer or early fall this year, with an initial total of 20 daily round-trip flights being allocated to USA airlines between the USA and Havana and 10 daily round-trip flights to 9 other Cuban cities.
Those slots will be hard fought over as the consolidated “big 4”:— American Airlines (AAL), Delta Air Lines (DAL), United Airlines (UAL) and Southwest Airlines (SWA)) and independents Alaska Airlines (ASA), JetBlue Airways (JBL) and Silver Airways rushed to get their applications in. Ultra low-cost carrier (ULCC) Spirit Airlines (SPR), based in Florida, has also said it said it plans to apply.
(AAL) is requesting 10 daily frequencies to Havana from its Miami hub plus additional service to Havana from Charlotte, Dallas/Fort Worth, Los Angeles, and Chicago. (AAL)’s proposal also includes daily service between Miami and 5 other Cuban cities.
To Havana, (AAL) is proposing 10 daily flights from Miami, 1 daily from Charlotte and (DFW), and 1 weekly from (LAX) and Chicago. (AAL) also wants to fly 2x-daily services out of Miami to Santa Clara, Holguin, and Varadero; and daily service to Camaguey and Cienfuegos.
Delta (DAL) wants to fly daily flights to Havana from Atlanta, New York (JFK), Miami, and Orlando, using Boeing 757-200s out of its Atlanta and (JFK) hubs and Boeing 737-800s on the Miami and Orlando routes.
United (UAL)'s proposal seeks 11 roundtrip flights per week to Havana that includes daily service from New York, plus one additional Saturday flight (8x-weekly flights), along with a Saturday-only flight from Houston George Bush Intercontinental, Washington Dulles and Chicago O'Hare (3x-weekly flights). (UAL) would use 737-800s.
Southwest (SWA) wants to serve Havana from 3 Florida airports: (Fort Lauderdale, Tampa Bay, and Orlando) as well as fly to Varadero and Santa Clara from Fort Lauderdale. (SWA) is an all-737 operator.
New York-based, JetBlue (JBL) would put Airbus A320s and A321s on 15 daily frequencies connecting four Cuba cities with 6 cities. These include 2x-daily, New York (JFK) - Havana; 4x-daily, Fort Lauderdale - Havana; 1x-daily, Fort Lauderdale - Camaguey; 1x-daily, Fort Lauderdale - Holguiìn; 1x-daily, Fort Lauderdale - Santa Clara; 2x-daily, Orlando - Havana; 2x-daily, Tampa - Havana; 1x-daily, Newark - Havana; and 1x-daily, Boston - Havana.
JetBlue (JBL) said it anticipates a start date of September 8, or within <100 days after receipt of all necessary approvals, whichever is earlier.
Alaska Airlines (ASA) (seemingly the only USA carrier with a concept of Cuba’s still limited and fragile infrastructure) has placed a relatively modest request to fly 2x-daily nonstop flights from Los Angeles to Havana operating 737-900ERs.
Silver Airways, a small regional carrier that operates Saab 340B turboprops, is seeking approval to serve 10 Cuban destinations from the 5 Florida cities of Key West, West Palm Beach, Fort Lauderdale, Jacksonville, and Fort Myers/Naples.
Although the restoration of an air bilateral with Cuba is widely welcomed, general USA tourist travel to Cuba is still not allowed. Initially, at least, the new arrangement will be aimed at facilitating visits by travelers who fall under one of the 12 categories authorized by the USA Department of Treasury’s Office of Foreign Assets Control.
However, USA President Barack Obama is scheduled to make an historic visit to Cuba March 21 - 22 (the 1st sitting USA President to visit the Caribbean island in 88 years) as part of efforts to normalize diplomatic relations.
(IATA) and others forecast that USA tourism to Cuba will see huge growth.
News Item A-2: "Cuba is a Rare, Hot-growth Opportunity for USA Airlines" by Karen Walker in (ATW) Editor's Blog, March 3, 2016.
Large and significant as it is, the USA domestic air transport market is essentially a mature market, growing at about +4 to +5% annually. Relative to regions like China, which is seeing domestic travel increase at about +10% year over year, or India, that is seeing an astonishing +20% clip, the USA market has limited growth opportunities.
That helps to explain the mass rush to grab available frequencies to Cuba for scheduled flights that will become available later this year under the new USA - Cuba air bilateral.
American Airlines (AAL), Delta Air Lines (DAL), (SWA), United Airlines (UAL), Alaska Airlines (ASA), JetBlue Airways (JBL), Silver Airways, (SPR), and Frontier Airlines (FRO) all want to get a slice of what is a rare new growth market right on America’s doorstep. Cuba isn’t a USA domestic destination, of course, but much of the Caribbean is regarded as “almost” domestic (especially from Florida and east coast cities (and Puerto Rico is a USA territory)) in terms of appeal and ease of access for American tourists.
What each of these airlines wants to establish is a foot in the door of this new market, then build on it as USA - Cuban diplomatic relations thaw and normalize. Here’s an opportunity to get in 1st on a near-USA market that is expected to see double-digit air traffic growth, akin to the emerging and much further afield markets like China and India.
India, of course, is a much tougher market for USA airlines to break into because the major Gulf carriers got ahead of that game. China, also, is a huge future market (but Chinese carriers are also growing fast, in numbers, quality, aircraft capacity and ability to compete).
Cuba has only Cubana (CUB), a small airline with very limited resources and which has been severely restricted by Havana in the types and origin of aircraft and components it can operate.
In the application filings submitted this week to the USA Department of Transportation, (AAL) made the biggest grab, seeking >half of the 20 daily round trips that are expected to be made available to Havana, as well as some of the 10 daily round trips dispersed among Cuba’s other 9 airports. (AAL)’s interest is natural, given its Miami hub, but it seems unlikely that the (DOT) will extend a large hand to the largest of the big 4 consolidated airlines. That probably explains why (AAL) has hedged its bets and also submitted applications for Cuban cities like Santa Clara, Holguin, and Varadero, which the other airlines are far less interested in. Havana is the prize.
What will be interesting to see is whether the (DOT) divvies this year’s flight allocations between a couple of the “big 4,” enabling them to offer meaningful frequencies and connections from the get-go, or whether it will disperse them more widely so that independents like JetBlue (JBL) (which operates charters to Cuba), Alaska (ASA), or even small turboprop regional, Silver can get a foothold and keep the market competitive. My guess is the latter.
The timing of this opportunity is also interesting. A few short years ago, (SWA) would not have been a player, but since its acquisition merger with (CQT), it has become an international airline with a significant Caribbean market it wants to grow. Will the (DOT) regard (SWA) as a low-cost competitor in its decision making, or just another one of the big 4 that dominates 80% of the USA domestic market and warrants as much control as (AAL), (DAL), and (UAL)?
But remember, the real growth trajectory won’t occur until the USA lifts its prohibition on regular American tourists who can visit Cuba, just as they do in their millions to the Virgin Islands, Bahamas, Mexico and the rest of the Caribbean. That’s the historic landmark that these USA airlines want to get ahead of and why these initial flight allocations are so important. It’s a critical moment for a USA airline to get in on the ground as a new market opens; and that’s a rare opportunity.
News Item A-3: Spirit Airlines (SPR) and its flight attendants (CA), represented by the Association of Flight Attendants - (CWA) (AFA), have reached a tentative agreement on a 5-year labor contract. The agreement contains wage increases, healthcare and other benefits.
The (AFA) represents >2,200 flight attendants (CA) for Spirit (SPR).
The (AFA) negotiating committee will be sharing complete details of the agreement with (SPR)'s flight attendant (CA) leadership, and once approved, will be put before all flight attendants (CA) for a ratification vote.
April 2016: Spirit Airlines (SPR) commenced services between Los Angeles (LAX) and Phoenix (PHX) on April 8. (SPR) will serve the 594 km sector 2x-daily onboard its A319 fleet. The airport pair is already well served with 4 incumbent carriers. American Airlines (AAL), Southwest Airlines (SWA), Delta Air Lines (DAL) and United Airlines (UAL) combined already offer 182x-weekly flights. (SPR) now serves 18 destinations non-stop from Los Angeles and 5 from Phoenix.
(SPR) begins 2x-daily, Seattle/Tacoma - Los Angeles and - Las Vegas on April 14.
August 2016: News Item A-1: Spirit Airlines (SPR) begins service to 4 southern cities from Akron/Canton, Ohio. Fort Lauderdale will be offered daily from November 10, Tampa 3x-weekly seasonal service begins November 10, Fort Myers, 4x-weekly seasonal service November 11, and Myrtle Beach, South Carolina begins seasonal daily service April 27, 2017.
News Item A-2: Spirit Airlines (SPR) has named 2 new executives to its leadership team. Matt Klein joins (SPR) as the Senior VP & (CCO), effective August 11, and Rocky Wiggins joins as the Senior VP & (CIO), effective September 26.
September 2016: Airbus (EDS) delivered a new A321 to 140 Spirit Airlines (SPR) employees at a ceremony in Mobile, Alabama, USA. This is the 1st Airbus (EDS) airplane to be delivered in the USA from their only USA facility.
October 2016: Spirit Airlines (SPR), headquartered in Miramar, Florida (USA), took delivery on October 7 of the very 1st A320neo (6833) to be delivered to a USA customer. It is the 1st of 55 A320neo family aircraft (SPR) the low cost carrier (LCC) has ordered and all will be powered by Pratt & Whitney (PRW) "Pure Power" (PW1100-JM) geared turbofan (GTF) engines. This aircraft (leased from AerCap (DEA)) is the 89th aircraft to join (SPR)'s fleet.
See photo - "SPR-A320neo - 2016-10.jpg."
November 2016: News Item A-1: The 1st commercial passenger flights in 55 years between the USA and Havana, Cuba, departed November 28, as Fort Worth, Texas-based American Airlines (AAL) and New York-based low-cost carrier (LCC) JetBlue Airways (JBL) each launched scheduled service to the island nation’s capital.
(AAL) flight 17, a Boeing 737-800, took off from Miami International Airport at 7:41 am and landed at Havana’s José Martí International Airport at 8:25 am. (JBL) flight 243, an Airbus A321, departed New York’s (JFK) International Airport at 9:45 am and landed in Havana at 12:34 pm.
The (AAL) and (JBL) flights are the vanguard of scheduled commercial passenger service to Havana from 8 USA airlines. Havana service was also awarded to Alaska Airlines (ASA), Delta Air Lines (DAL), Frontier Airlines (FRO), Southwest Airlines (SWA), Spirit Airlines (SPR) and United Airlines (UAL).
(UAL) is scheduled to begin its Havana service from Newark Liberty International Airport on November 29, with (DAL), (SPR) and (FRO) all launching Havana service December 1. (SWA) will launch Havana service December 12. (ASA) will launch its Havana service from Los Angeles on January 5, 2017.
The USA announced the resumption of commercial passenger airline service to Cuba following the signing of an agreement between the 2 countries on February 17. The 1st commercial flights between the USA mainland and Cuba began August 31, with a (JBL) flight from Fort Lauderdale, Florida, to Santa Clara, Cuba. That same day the USA Department of Transportation awarded 8 USA airlines service routes to Havana.
January 2017: A321-231 (7522, N672NK), ex-(D-AZAU) delivery.
February 2017: A321-231 (7395, N673NK), ex-(F-WZMU) delivery.
April 2017: Spirit Airlines (SPR) has lowered its revenue guidance for the 2017 1st quarter by 2% points, according to an (SEC) filing. In the report, (SPR) said its 1st-quarter 2017 total revenue per available seat mile (TRASM) will be down -4% to -5% year-over-year (YOY), deepened from the company’s previously announced estimate of a 2.5% (YOY) (TRASM) drop.
(SPR) attributed the revised estimate to “our underestimating the impact related to the Easter holiday shift.” In 2017, the Easter holiday is falling within the fiscal 2nd quarter, as opposed to 2016 when Easter occurred in late March within the fiscal 1st quarter.
Nonetheless, (SPR) was optimistic for the 2nd quarter. “Based on current bookings, we are encouraged by the 2nd-quarter revenue trends and continue to believe (TRASM) for the 2nd quarter will be positive year over year,” (SPR) said. The (ULCC) is adding 10 new routes this spring, starting with daily Houston - Newark service and daily Houston - Seattle service as of April 27.
(SPR) released its original 1st-quarter guidance February 7. Along with the now-revised (TRASM) guidance, (SPR) estimated the company’s (CASM) would increase +15.2% (YOY) during the 2017 1st quarter, and by year-end 2017 would increase by approximately +18.5%. (SPR) estimated its (CASM) ex-fuel for the 1st quarter will increase slightly, between 0% and +1%; for the full-year 2017, (SPR) estimated its (CASM) ex-fuel will drop slightly, between 0% and -1%.
In 2016, Spirit (SPR)’s net profits fell -16.5% (YOY) to $265 million, largely in the face of increased competition. “In a lot of mid-continent markets our pricing was ignored; we were viewed as a small carrier and with all the restructuring going on, we were ignored in many of those markets,” (SPR) President & (CEO) Bob Fornaro said in February. “That’s changed and basically today we see heavy competition across our whole network.”
(SPR) is expected to announce its 1st-quarter 2017 results by the end of April.
May 2017: News Item A-1: Ultra low-cost carrier (ULCC) Spirit Airlines (SPR) reported a 1st-quarter net profit of +$31.9 million, down -48.4% from net income of +$61.9 million in the prior-year period, but (SPR) believes it is on the upswing.
The aggressive price matching of major USA airlines has led the airline to focus more on improving operating performance and on managing its fares more thoughtfully, (CEO) Bob Fornaro told analysts. “We still have very low fares, but it’s no longer load factor at all cost,” he said. “We are getting better at managing our capacity.[With] the pricing environment today, which is a lot of price matching, you have to be more nimble with the way you manage your schedules, and I think you’re going to see a lot more of that going forward.” Fornaro noted that Spirit (SPR)’s on-time performance improved +10.2% points year-over-year (YOY) to 75.5% in the 1st quarter. “While we still have a ways to go to reach our desired operational goals, this was a significant improvement,” he said.
(SPR)’s 1st-quarter revenue rose +10% (YOY) to $591.7 million, while expenses jumped +21.9% to $532.3 million, including a +62.6% leap in fuel costs to $139.8 million and a +9.2% increase in labor costs to $127.1 million. Operating profit was +$59.4 million, down -41.4% from operating income of $101.3 million in the prior-year period.
(SPR)’s 1st-quarter traffic rose +10.7% to 5.6 billion RPMs on a +14.9% increase in capacity to 6.9 billion ASMs, producing a load factor of 81.6% LF, down -3.1 points. Yield decreased 0.7% to 10.5 cents.
News Item A-2: Spirit Airlines (SPR) added 2 routes at Pittsburgh International Airport on May 25, and plans to introduce several more throughout the summer. (SPR), the ultra-(LCC) started daily flights from Pittsburgh to Dallas/Fort Worth International Airport, as well as seasonal daily service to Myrtle Beach, South Carolina. (SPR) will compete with American Airlines (AAL) and Southwest Airlines (SWA) on flights to the Dallas area.
News Item A-3: Spirit Airlines (SPR) said crew (FC) scheduling matters are the most difficult part of negotiating a new pilot (FC) contract.
(SPR) has since requested a temporary restraining order compelling its pilots (FC) to cease what the ultra low-cost carrier (ULCC) called “a pervasive illegal work slowdown” has been granted by a the US federal court.
Spirit (SPR) filed a lawsuit May 8 in a US district court in Fort Lauderdale against the Air Line Pilots Association (ALPA), which represents (SPR)’s nearly 1,600 pilots (FC), asking for a “preliminary injunction compelling an immediate end to this illegal work slowdown” that (SPR) said has cost it $8.5 million in lost revenue since the beginning of the month.
After granting the temporary restraining order, the court ordered a motion for a hearing on a preliminary injunction. The hearing will be held May 15.
(SPR) said 15% of its flights have been affected this month by the alleged work action. “We sincerely apologize to our customers for the disruption and inconveniences they have suffered,” (SPR) said after the temporary restraining order was granted. “We believe this is the result of intimidation tactics by a limited number of our pilots (FC) affecting the behavior of the larger group.”
Flight cancellations at Fort Lauderdale-Hollywood International Airport (FLL) on May 8 led to a chaotic situation in which police were called to the scene to quell an uproar by upset passengers. Video widely shared on social media shows pushing and shoving near a (SPR) check-in counter at (FLL) and police intervening.
A (SPR) spokesperson said in an emailed statement that (SPR) was “shocked and saddened to see the videos” of disorder at (FLL). “This is a result of unlawful labor activity by some (SPR) pilots (FC) designed to disrupt (SPR) operations for our customers, by canceling multiple flights across our network,” the spokesperson said.
In an emailed statement, (ALPA) said the union and “the (SPR) pilot (FC) group it represents are not engaged in a job action. Rather, (ALPA) and the (SPR) pilots (FC) are continuing to do everything possible to help restore (SPR)’s operations, which have experienced significant problems over the past several days. While we will continue these efforts, we will actively defend the association, its officers and its member pilots (FC) against the unwarranted and counterproductive legal action brought [May 8] by Spirit Airlines.”
After the court issued the temporary restraining order, (ALPA) stated: “Spirit (SPR) pilots (FC) are committed to helping impacted passengers and the company restore normal operations. The court has spoken and Spirit (SPR) pilots (FC) will fully comply with the order handed down, which is completely in line with our overriding goal: the resumption of normal operations. We call on the company to join forces with (ALPA) and the Spirit (SPR) pilots (FC) to do just that.”
(SPR) and its pilots (FC) have been engaged in collective bargaining negotiations since February 2015. The pilots’ labor contract became amendable on July 31, 2015. In a statement issued earlier this year, (ALPA) said Spirit (SPR) pilots (FC)’ compensation “lags far behind their peers at comparable airlines, and that gap continues to grow as other pilot groups reach new agreements.”
In the May 8 lawsuit, (SPR) said (ALPA) “expressed its strong displeasure” with a company proposal made on April 25. Days later, “(SPR) began to see a significant increase” in flight cancellations attributed to “pilot (FC) unavailability,” (SPR) stated in the lawsuit.
A320-232 (7679, N649NK), ex-(F-WWDH) and A321-231 (7668, N675NK), ex-(D-AVYS), deliveries.
August 2017: The 1st delivery of an A320 aircraft from the Airbus USA Manufacturing Facility has taken place in Mobile, Alabama, USA. The aircraft, delivered to Spirit Airlines (SPR).
September 2017: After contract negotiations broke down on September 9, pilots (FC) for Spirit Airlines (SPR) voted unanimously September 13 to authorize a strike if further mediation efforts are unproductive. According to the Air Line Pilots Association (ALPA), which represents (SPR) pilots (FC), if and when the National Mediation board (NMB) decides that additional talks are ineffectual, the (NMB) can extend an offer to arbitrate the dispute. If either side declines arbitration, the parties enter a 30-day cooling off period, after which both sides could exercise self-help, whether it is a strike by the pilots (FC) or a lockout by (SPR). (SPR) pilots (FC) would legally be able to strike once that 30-day cooling-off period expires, (ALPA) said.
At this time, no additional mediation sessions are scheduled, (ALPA) said. “[But] our goal remains to negotiate a contract that protects both the work and the welfare of our pilots (FC),” (SPR) (ALPA) pilot group Chairman Stuart Morrison said. “(SPR) pilots (FC) absolutely do not want to go on strike.”
(SPR) and its pilots (FC) have been engaged in collective bargaining talks since February 2015. Their labor contract became amendable July 31, 2015. The parties have wrangled publicly during the negotiations, as various pilot (FC) no-show incidents have led to flight cancellations in what (SPR) called a “pervasive illegal work slowdown” in a May 8 temporary restraining order lawsuit filed by (SPR) against (ALPA), which was subsequently granted by a USA federal court. The suit and restraining order followed a May 8 near-brawl by upset passengers near a (SPR) check-in counter at Fort Lauderdale-Hollywood International Airport that was seen widely on social media. The 2 parties quickly agreed to uphold the restraining order after the negative publicity.
“The strike authorization vote by (SPR) pilots (FC) does not mean a strike is imminent. The vote is a routine action required by the (ALPA) constitution which allows the union members to authorize their leadership to call a strike,” a (SPR) spokesperson said. “We continue to meet and make progress in mediated collective bargaining sessions. In fact, the vast majority of the provisions have already been agreed to, thanks to the diligent work of the union and the company negotiating teams. We remain committed to reaching an agreement as quickly as possible.”
October 2017: News Item A-1: Ultra (LCC) Spirit Airlines (SPR) posted a +$60.2 million net profit for the 2017 3rd quarter, a -26% decline from +$81.4 million in (3Q) 2016. (SPR) said the results were attributable to the financial and operational impact from the August to September hurricanes, combined with “revenue overhang” from (SPR) pilot (FC) work slowdown actions earlier in the year.
(SPR) said the combined factors negatively impacted 3rd-quarter revenue by -$40 million and operating income by about -$39 million. (SPR) canceled >1,650 flights during the hurricanes. “In preparation for Hurricane Irma, we relocated our Systems Operations Control center and >305 [personnel] and their families to our backup facility in Detroit where we ran our operations for about a week,” Spirit (SPR) President & (CEO) Robert Fornaro said. “It was a challenging quarter on many fronts.”
(SPR) reported operating revenue totaling +$687.2 million for the quarter, up +10.6% year-over-year (YOY), driven by a +11.2% increase in passenger flight segments. (TRASM), though, was down -6.3% (YOY), as passenger yields declined -4.1% to 10.65 cents in the face of aggressive pricing by (SPR)’s competitors. (SPR)’s non-ticket ancillary revenue for the quarter increased +14% (YOY). Non-ticket revenue per passenger increased +2.6% compared to (3Q) 2016.
(SPR)’s operating expenses increased +20% (YOY) to $583.1 million, also attributable to the increase in flights, but compounded by higher passenger re-accommodation expenses and rising fuel rates, in both fuel cost and gallons consumed. (CASM) excluding fuel and special items was down -1.1% (YOY), primarily driven by lower maintenance labor expenses per (ASM), the company said. (SPR) remains in open contract negotiations with pilots (FC); talks have been ongoing since February 2015.
(SPR)’s resulting operating profit for the quarter was +$104.1 million, down -23% (YOY), and its operating margin was 16.4%, excluding special items.
Spirit (SPR)’s 3rd-quarter traffic increased +15.2% (YOY) to 6.5 billion (RPM)s on an +18% rise in capacity to $7.7 billion (ASM)s, producing an 84% LF passenger load factor, down -2 points (YOY).
Looking to the 4th quarter, Spirit Executive VP & (CCO) Matt Klein previewed (SPR)’s market outlook, post-hurricanes. “We are experiencing a lingering impact from Hurricane Harvey, which is modestly affecting our Houston market [but] we are not seeing a significant lingering impact in Florida as a result of Hurricane Irma,” Klein said. “We’ve temporarily pulled down some of our capacity in several of our Caribbean locations, rightsizing them for the new demand environment post Irma and Maria.”
Citing the current pricing environment, but also figuring in continued improvement in non-ticket revenue, Klein estimated (SPR)’s 4th-quarter (TRASM) will decrease -4% and -6% (YOY).
“Based on our guidance for the 4th quarter, we are on target to achieve an operating margin of 14% to 14.5% for the full year 2017, [and] if you adjust for the impact of the pilot (FC) disruptions and hurricanes, that equates to an operating margin of about 17% for the year,” Fornaro said. “This is below where we had anticipated to land at the beginning of the year, but considering the aggressive pricing we’ve seen in about half our markets since late June, I think we’ve done a pretty good job being nimble and adapting as needed to address the challenges.”
News Item A-2: Spirit Airlines (SPR) has received its 1st Airbus A320neo (PW1100G-JM) (6833), making it the 1st airline in the USA to take delivery of the type.
December 2017: News Item A-1: Spirit Airlines (SPR) will begin Baltimore (BWI) to Montego Bay and (BWI) to Denver services from March 22, 2018.
News Item A-2: "Spirit Airlines CEO Fornaro to Step Down in 2019" by
Kristin Majcher email@example.com (ATW) Plus, Aviation Daily, December 13, 2017.
Spirit Airlines (SPR)’s (CEO) Bob Fornaro will leave his post on January 1, 2019, (SPR) said on December 13. Ted Christie, (SPR)’s (CFO), will take over the top role. Before that, Christie will become (SPR)’s President this coming January 1, when he will also take a seat on the board of directors. Christie joined (SPR) in 2012, and since has been promoted from Senior VP to Executive VP.
“I’ve known Ted for over 10 years, as a competitor, board member and as a colleague in management,” Fornaro said “I am confident that (SPR) and our team will respond very favorably to his leadership.”
Fornaro joined Spirit in January 2016, following the abrupt departure of longtime (CEO) Ben Baldanza. He has prioritized improving (SPR)’s reliability, cost structure and customer service. (SPR) has faced other challenges during Fornaro’s tenure, including pressure brought by legacy carriers’ roll out of unbundled fares, as well as operational issues stemming from pilot (FC) labor actions and storms.
“We’ve steadily improved our operational reliability and have introduced significant new technology and processes that allow us to run better and improve our guest experience,” Fornaro said. “In 2018, I expect us to continue investing in the operation to further improve reliability and push down costs. We also will focus on concluding a mutually beneficial agreement with our pilots (FC).”
January 2018: Nearly 3 years of contentious negotiations between ultra-(LCC) Spirit Airlines (SPR) and its pilots (FC) may be nearing an end as (SPR)’s flight deck crew (FC) prepares to vote on a tentative agreement (TA) for a new, 5-year labor contract.
Fort Lauderdale, Florida-based Spirit (SPR)’s pilots (FC), represented by the Air Line Pilots Association (ALPA), will vote in February on a (TA) endorsed by leaders of Spirit (SPR)’s (ALPA) unit. The contract would include “significant pay raises, job security provisions and improvements in retirement and insurance benefits,” (ALPA) said. The contract would last until March 1, 2023, according to (ALPA).
The (TA) resulted from January 8 to 12 talks in Herndon, Virginia, between (ALPA) and Spirit (SPR) management—assisted by the USA National Mediation Board (NMB) that led to an agreement in principle. (SPR) pilots (FC) had voted to authorize a strike if mediation failed.
A long-term contract ratified by (SPR)’s >1,600 pilots (FC) would be a welcome development for the (ULCC). Negotiations between the pilots (FC) and airline management, ongoing since 2015, became ugly in May 2017 when (SPR) accused flight deck crew (FC) of “a pervasive illegal work slowdown.” Flight cancellations, the airline attributed to the alleged slowdown, led to a chaotic situation in which police were called to Fort Lauderdale-Hollywood International Airport on May 8, 2017, to quell an uproar (featuring pushing and shoving near a Spirit (SPR) check-in counter) by upset passengers.
(ALPA) said the (TA), which will be voted on from February 7 to 28, features an average +43% increase in pilot (FC) pay rates on the date of signing, which is expected March 1.
February 2018: News Item A-1: Spirit Airlines (SPR) (started 5 new domestic routes from Colombus (CMH) in the space of 2 days on February 15 and 16), with links launching to Fort Lauderdale (FLL), Las Vegas (LAS), Orlando (MCO), SW Florida (RSW) and Tampa (TPA). (SPR) will operate daily frequencies on all 5 airport pairs and faces direct competition on each route.
Southwest Airlines (SWA) already serves all 5 links. The average sector length on (SPR)’s new routes is 1,707 km.
Routes as follows:
Columbus (CMH), all A319 7x- to Fort Lauderdale (FLL) vs Southwest Airlines (SWA) (12x-);
to Las Vegas (LAS) vs SWA) (13x-);
to Orlando (MCO) vs (SWA) (28x-), Frontier Airlines (FRO) (4x-), Delta Air Lines (DAL) (1x-);
to Southwest Florida (RSW) vs (SWA) (15x-), Frontier Airlines (3x-), Delta Air Lines (1x-);
to Tampa (TPA) vs Southwest Airlines (14x-), Frontier Airlines (3x-).
News Item A-2: Spirit Airlines’ (SPR) pilots (FC), represented by the Air Line Pilots Association (ALPA), have voted to ratify a new 5-year working agreement, concluding an often-contentious 3-year effort to secure a new labor contract.
According to (ALPA) and Spirit (SPR), the contract includes an average +43% pay increase effective on the date of signing, along with increased contributions to pilots (FC)’s retirement plans and $75 million in ratification compensation.
Negotiations between (SPR) management and the pilots’ (ALPA) representatives were conducted with National Mediation Board assistance for nearly 2 years; in January, the 2 sides reached a tentative agreement. “[The] new contract will give our pilots a deserved increase in pay and benefits and will allow the airline to operate more efficiently and reliably,” (SPR) (CEO) Robert Fornaro said, while (ALPA)’s (SPR) unit Chairman Stuart Morrison indicated the agreement will improve (SPR)’s ability to attract and retain new pilots (FC).
The resolution of the long-standing contract impasse relieves an extended period of labor-related uncertainty for (SPR).
Relations between (SPR) and its >1,600 pilots (FC) grew tense in 2017 when (SPR) was granted a temporary restraining order compelling its pilots (FC) to halt an alleged “pervasive illegal work slowdown” in the wake of stalled contract negotiations.
In early May, pervasive (FC) unavailability led to about 15% of (SPR)’s flight schedule being canceled.
The situation came to a head at Fort Lauderdale-Hollywood International Airport May 8, when police were called in to quell a passenger uproar near a Spirit (SPR) check-in counter, related to flight cancellations the airline attributed to the alleged slowdown, an incident widely seen on social media.
Several days later, both (SPR) and (ALPA) agreed to indefinitely extend the temporary restraining order and resume negotiations. Negotiations broke down again in early September, with pilots voting to an authorize a strike if further negotiations failed. The strike action never materialized.
Spirit (SPR) recently posted +$231 million in adjusted net profit (excluding a $199 million end-of-year tax related-benefit and other special charges) for 2017, down -20.7% from +$291 million in adjusted net profit for 2016. But operating revenues for the year increased +14%, driven by a +10.7% increase in flight volumes.
“[It was] an admirable performance considering the hurricanes and other disruptions this year,” (SPR) President & (CFO) Ted Christie said at the time.
March 2018: Following the resolution last week of a new labor contract with its pilots (FC), Fort Lauderdale-based ultra-(LCC) Spirit Airlines (SPR) raised its expected operating expenses excluding fuel for the 2018 1st quarter and full-year 2018 by approximately 3% points compared to 2017.
In an updated guidance statement, (SPR) forecast its adjusted (CASM) ex-fuel for 1st-quarter 2018 will decline about -3% year-over-year (YOY), narrowing from the -5.5% to -6.5% decline (SPR) forecast a month earlier. Similarly, (SPR) forecast the company’s full-year 2018 (CASM) ex-fuel would fall somewhere between flat and -1% (YOY), contrasted with a -3% to -5% drop the (ULCC) forecast on February 6.
(SPR)’s pilots (FC), as represented by the Air Line Pilots Association (ALPA), ratified on February 28 a new 5-year labor contract, ending a contentious 3-year series of negotiations between (SPR)’s 1,600 pilots (FC) and management. The contract included an immediate +43% pay increase effective on the date of signing, along with increased contributions to pilots (FC)’s retirement plans and $75 million in ratification compensation.
(SPR) did not adjust its revenue forecast; (SPR) is still expecting (1Q) 2018 (TRASM) to fall between 1% and 2.5%. (SPR)’s forecast capital expenditures for full-year 2018 also remained unchanged at an expected $649 million, including $354 million in aircraft capital commitments relating to 10 aircraft delivered, or scheduled to be delivered, in 2018.
According to its fleet plan, (SPR) is scheduled to take delivery of 5 Airbus A321ceos and 1 A320ceo in the 2018 1st quarter, followed by an additional 4 A320ceos by the end of the year, bringing (SPR)'s fleet to a total of 122 all-Airbus aircraft by year-end 2018. (SPR) has an additional +43 A320neos on order, with deliveries expected between (3Q) 2019 through 2021.
Click below for photos:
SPR-A319 - 2015-02.jpg
SPR-A319 - NEW LIVERY - 2014-09
SPR-A319 - NEW LIVERY 2014-07.jpg
SPR-A319-132 - NEW LIVERY - 2014-10
SPR-A320 - 2011-10
SPR-A320-232 - 2011-11
SPR-A320-232 - The Yellow Cab-2015-06.jpg
SPR-A320neo - 1st - 2016-10.jpg
SPR-A320NEOS - 2011-11
SPR-A321 CEO - 2013-06
SPR-A321-231 - 2015-08.jpg
SPR-A321-231 N677NK 2018-03.jpg
1 737-4Q8 (CFM56-3C-1) (2505-25105, /93 N772AS), (AWW) LEASED, (CIN) WET-LEASED 2012-06. 12F, 132Y.
0 DC-9-31 (JT8D-7B HK) (46202), EX-(VAU). RETIRED. 117Y.
0 DC-9-31 (JT8D-7B HK) (603-47526, /70), WFU. 117Y.
0 DC-9-31 (JT8D-9A HK) (516-47326, /69 N928ML; 370-47268, /68 N969ML), HOMFELD LEASED 1992-05, 47326 PARTED OUT 2000-02, LEASED TO (REU). 47268 WFU. 10C, 100Y.
0 DC-9-32 (JT8D-15 HK) (182-47111, /67 N17535), EX-(CAL), (TIA) LEASED. RETURNED.
0 DC-9-32 (JT8D-15 HK) (171-45788, /67 N12505), SCRAPPED 1999-12.
0 DC-9-32 (JT8D-15 HK) (214-47131, N941ML, RETURNED 2000-10; 619-47514, SOLD).
0 DC-9-32 (JT8D-15 HK) (923-48111, /79 N133NK), LEASED TO (USV) 2001-09. SOLD TO JETRAN 2003-11. 10C, 100Y.
0 DC-9-41 (JT8D-17A HK) (722-47604, /74 N130NK; 724-47605, /74 N131NK), 47605 4 YEAR LEASED TO (DIR) 2001-06, RETURNED FROM (DIR) 2002-05. (SSS) LEASED. 47604 SCRAPPED 2004-02. 47605; WFU. 10C, 110Y.
0 MD-81 (JT8D-217C) (924-48015, /81 N810NK), EX-(AUL), NATIONAL CITY LEASED, (58-48017, /80 N811NK; 1078-48021, /83 N812NK; 49115; 49164). 48015; PARTED OUT 2005-11. 48017 SOLD TO MAGNUM AERODYNAMICS 2006-08. 12C, 138Y.
0 MD-81 (JT8D-217C) (941-48016, /80 N918NK; 995-48018, /81 N919NK) EX-(AUL), (SFA) LEASED 2000-07. 48018 SOLD TO AMERICAN AIRCRAFT COMPANY 2005-05. 481016; SOLD TO AMERICAN AIRCRAFT 2005-12. 12C, 138Y.
0 MD-81 (JT8D-217) (991-48058, /81 N805NK; 975-48051, /81 N806NK), EX-(FAN), FROM SANWA 1999-07). 48051; 48058; SCRAPPED 2004-11. 12C, 138Y.
0 MD-82 (JT8D-217C) (1045-48020, /81 N823NK), WELLS FARGO LEASED 2001-09. RETURNED, LEASED TO (KUL) 2005-02. 12C, 138Y.
0 MD-82 (JT8D-217C) (1078-48021, /83 N812NK), EX-(AUL), (CLO) LEASED 1999-12. WFU IN STORAGE 2005-01. SOLD TO (SFA), LEASED TO (CML) 2005-02. 12C, 138Y. 150Y.
0 MD-82 (JT8D-217) (1005-48048, /81 N801NK; 2061-53168, /93 N802NK; 1035-48087, /81 N803NK), EX-(RNO), SPIRIT SILVER SPRING LEASED. 48048 SOLD TO AVIOSERV 2005-05. ALL WFU. 12C, 138Y.
0 MD-82 (JT8D-217A) (1085-49104, /82 N804NK), EX-(ASA), UNICAPITAL LEASED 1999-02, PEMCO MAINTENANCE. RETURNED, LEASED TO (BEL) 2007-07 AS (ZA-ARD). 12C, 138Y.
0 MD-82 (JT8D-217) (1080-49126, /82 N820NK), EX-(AMX), (TCI) 6 YEAR LEASED 2000-11. RETURNED 2005-05. 12C, 138Y.
0 MD-82 (JT8D-217A) (1092-49140, /82 N816NK; 1093-49141, /82 N817NK; 2000-09), EX-(CEA), (GEH) LEASED 2000-06. 49140 RETURNED 2004-06. 49141; SCRAPPED AT (FLL) 2005-10. 12C, 138Y.
0 MD-82 (JT8D-217) (1096-49144, /83 N800NK), NICHIMEN LEASED 1997-12. RETURNED 2006-08, LEASED TO (TTZ). 12C, 138Y.
0 MD-82 (JT8D-217A) (1208-49374, /85 N374GE; 1278-49417, /86 N417GE), EX-(KAL), (GEH) LEASED. ALL RETURNED. 12C, 138Y.
0 MD-82 (JT8D-217A) (1260-49415, /87; 49508, /00 N603CA), EX-(SHY), (CLO) 7 YEAR LEASED 2000-01. 49508; PURCHASED OFF LEASE FROM (GRB), & SOLD TO ANDES AIR (ADZ) 2006-12. 49415; SOLD TO AIR TRANSPORT ACQUISITION CORPORATION 2007-06. 12C, 138Y.
0 MD-82 (1754-49931, N829NK; 1756-49932, N830NK), (DEA) LEASED 2003-08. RETURNED. 12C, 138Y.
0 MD-83 (JT8D-219) (1483-49619, /88 N814NK; 1818-53015, /91 N824NK), EX-(ACH), SANWA LEASED 1999-02. 53015 RETURNED (GAX) 2004-06. 49619 RETURNED 2006-12. 12C, 138Y.
0 MD-83 (JT8D-219) (1272-49392, /86 N822NK), EX-(CAL), WATCH LEASED 2001-04. RETURNED TO (CIS) 2006-09, LEASED TO (LAV). 12C, 138Y.
0 MD-83 (JT8D-219) (1354-49449, N833NK), (DEA) LEASED 2003-12. RETURNED 2005-06. 12C, 138Y.
0 MD-83 (JT8D-219) (1585-49847, N834NK), BOUGHT FROM MYCAL FINANCE 2003-12. RETURNED 2006-02. 12C, 138Y.
0 MD-83 (JT8D-219) (52012, 2001-06; 52014), EX-(ACH), (GEF) LEASED. 53012 RETURNED 2005-08. 52014; WFU. 12C, 138Y.
0 MD-83 (JT8D-219) (1656-49793, /90 N827K), EX-(AAL)/(RNO), (GRB) LEASED 2002-05. RETURNED, LEASED TO (SWF). 12C, 138Y.
0 MD-83 (JT8D-219) (1540-49823, /88 N828NK), EX-(MDR), (TIA) LEASED 2003-04. RETURNED. 12C, 138Y.
0 MD-83 (JT8D-219) (1464-49617, N831NK; 1611-49618, N832NK), (GRB) LEASED 2003-10. 49617; RETURNED 2005-07. 49618; BROKEN UP. 12C, 138Y.
0 MD-83 (JT8D-219) (1776-53046, N835NK; 1777-53045, N836NK), (GEF) LEASED 2004-02. 53045; RETURNED 2006-05. 12C, 138Y.
0 MD-83 (JT8D-219) (2061-53168, N803NK), LEASED, RETURNED 2006-06. 12C, 138Y.
0 MD-87 (JT8D-219) (1634-49777, N807NK), EX-(GAR), (GRB) LSD, RTND 2007-09. 12C, 138Y.
1 +54 ORDERS A320neo FAMILY AIRCRAFT (PW1100-JM) (1ST A320neo, 2016-10, D-A3A1), 50 ORDERS FROM AIRBUS (EDS) AND 5 LEASED FROM AERCAP (DEA). ALL WITH SHARKLETS.
2 +30 OPTIONS A319-132 (V2524-A5) (2603, /05 N509NK; 2622, /05 N510NK), (SIL) LSD. 10, 135Y.
33 A319-132 (V2524-A5) (2424, /05 N501NK "SPIRIT OF DETROIT;" 2433, /05 N502NK "SPIRIT OF ST MAARTEN/ST MARTIN;" 2470, /05 N503NK "SPIRIT OF THE CARIBBEAN;" 2473, /05 N504NK "SPIRIT OF THE BAHAMAS;" 2485, /05 N505NK; 2490, /05 N506NK; 2560, /05 N507NK; 2567, /05 N508NK; 2603, /05 N509NK; 2622, /05 N510NK "SPIRIT OF FORT LAUDERDALE;" 2659, /06 N511NK "SPIRIT OF ST THOMAS;" 2673, /06 N512NK "SPIRIT OF TURKS & CAICOS ISLANDS;" 2679, /06 N514NK "SPIRIT OF CAYMAN ISLANDS;" 2698, /06 N515NK "SPIRIT OF SAN JUAN;" 2704, /06 N516NK "SPIRIT OF CANCUN;" 2711, /06 N517NK; 2718, /06 N518NK "SPIRIT OF THE DOMINICAN REPUBLIC;" 2723, /06 N519NK "SPIRIT OF FORT MYERS;' 2784, /06 N520NK "SPIRIT OF ATLANTIC CITY;" 2797, /06 N521NK "SPIRIT OF NEW YORK/LA GUARDIA;" 2893, /06 N522NK "SPIRIT OF LAS VEGAS;" 2898, /06 N523NK "SPIRIT OF TAMPA;" 2929, /06 N524NK "SPIRIT OF SUNCATCHER;" 2942, /06 N525NK "SPIRIT OF THE AMERICAS;" 2963, /06 N526NK; 2978, /07 N527NK; 3007, /07 N529NK; 3017, /07 N530NK; 3026, /07 N531NK; 3165, /07 N532NK; 3393, /08 N533NK; 3395, /08 N534NK), (ILF) LSD. 10C, 135Y.
1 A319-132 (V2524-A5) (2983, /06 N528NK), MACQUARIE AIRFINANCE LSD. 10C, 135Y.
2 A319-132 (V2524-A5) (3393, /08 N533NK; 3394, /08 N534NK), (GEF) LSD 2006-02. 10C, 135Y.
1 +44 ORDERS (2016-02) A320-200neo (PW1100G-JM) (6833, 2016-10 - SEE PHOTO - - "SPR-A320neo - 2011-11."):
2 +4 ORDERS A320-232 (V2527-A5) (5672, N621NK, 2013-07), (GEF) LSD 2013-03. 4C, 174Y.
2 +28 ORDERS A320-232 (V2527-A5) (7679, N649NK, 2017-05), EX-(F-WWDH), 2017-05. 4C, 174Y:
2 A320-232 (V2527-A5) (4321, /10 N603NK; 4431, /10 N604NK), AERVENTURE LSD. 4C, 174Y.
11 A320-232 (V2527-A5) (4264, /10 N602NK; 4592, N606NK 2013-07; 4595, /11 N607NK - - SEE PHOTO - - "SPR-A320-232 - THE YELLOW CAB, 2015-06.jpg;" 4902, /10 N608NK - - SEE PHOTO - - "SPR-A320-232 2011-10;" 4996, N611NK, 2012-01; 5029, N612NK, 2012-02; 5042, N613NK, 2014-03; 5370, N616NK, 2013-07; 5387, N617NK, 2013-07; 5458, N618NK, 2013-07; 5880, N624NK, 2013-12; 5999, N626NK, 2014-03; 6586, N642NK, 2015-05), 4C, 174Y.
1 A321-200, DELIVERED 2016-09 - THE 1ST "MADE IN USA" AIRBUS AIRPLANE MANUFACTURED AT THE AIRBUS MOBILE, ALABAMA, USA FACTORY.
1 +20/10 OPTIONS A321-211 (V2500) (1794, N586NK 2004-10; 2476), 1794; RTND, LST (MON) 2008-03. 16C, 182Y.
3 A321-231 (V2500) (1195, /04 N593NK; 1408, 2004-09; 1438, N585NK; 1794, N586NK; 2476, /05 N587NK "SPIRIT OF JAMAICA;" 2590, /05 N588NK). 1408; RTND (PEB) 2008-01. 1195; & 1438; RTND (PEB), LST (IMU) 2008-02. 1794; RTND (DEA), LST (MON) 2008-02. 16C, 182Y.
1 A321-231 (V2500) (6672, /15 N657NK), EX-(D-AVZF), 1ST IN "YELLOW CAB" COLOR SCHEME - SEE PHOTO. 16C, 182Y.
5 A321-231 (V2500) (6867, N661NK; 7522, N672NK, 2017-01; 7395, N673NK, 2017-02; 7668, N675NK, 2017-05; N677NK - SEE PHOTO), EX-(D-AVXQ, D-AZAU & F-WZMU). 16C, 182Y.
Click below for photos:
SPR-1-BEN BALDANSA CEO-2005-12
SPR-1-BOB BALDANZA CEO-2006-02
SPR-3-Matt Klein 2018-03.jpg
SPR-4-TED CHRISTIE CFO 2012-04
SPR-8-Edward Garduno - 2nd R-2015-06.jpg
SPR-9-N Paul Berry - 2nd L-2015-06.jpg
H MCINTYRE GARDNER, CHAIRMAN (2013-08).
MARK KAHAN, VICE CHAIRMAN, & GENERAL COUNSEL.
Mark S Kahan joined Spirit (SPR) in February of 1996 as Vice Chairman of the Board, Executive Vice President, Chief Operating Officer (COO), and General Counsel. He served as (COO) until January 2001. From 1982 until 1996, Mark was engaged in the private practice of law in Washington DC and also served as Managing Director of an airplane leasing concern, a residential real estate firm, and was a co-founder and finance committee chairman of Air America, a post de-regulation passenger and cargo airline. Prior thereto, Mark served as an Associate Director of the USA Civil Aeronautics Board from 1978 to 1981, Deputy Solicitor, USA Department of Energy from 1977 to 1978, and Staff Counsel to the New York State Public Service Commission from 1972 to 1977. Mark holds a BS and JD from Columbia University.
BOB FORNARO, PRESIDENT & CHIEF EXECUTIVE OFFICER (CEO), EX-(CQT) (2016-01).
Bob will leave his post on January 1, 2019. “I’ve known Ted Christie for >10 years, as a competitor, board member and as a colleague in management,” Fornaro said “I am confident that (SPR) and our team will respond very favorably to his leadership.”
Fornaro joined Spirit (SPR) in January 2016, following the abrupt departure of longtime (CEO) Ben Baldanza. He has prioritized improving (SPR)’s reliability, cost structure and customer service. (SPR) has faced other challenges during Fornaro’s tenure, including pressure brought by legacy carriers’ roll out of unbundled fares, as well as operational issues stemming from pilot (FC) labor actions and storms.
“We’ve steadily improved our operational reliability and have introduced significant new technology and processes that allow us to run better and improve our guest experience,” Fornaro said. “In 2018, I expect us to continue investing in the operation to further improve reliability and push down costs. We also will focus on concluding a mutually beneficial agreement with our pilots (FC).”
TED CHRISTIE, PRESIDENT, (2018-01).
Ted will take over from Bob Fornaro on January 1 in 2019. Ted joined Spirit Airlines in April 2012, ex-Pinnacle Airlines, and acted as the Senior VP and Chief Financial Officer. He was later promoted to Executive Vice President.
JOHN BENDORAITIS, SENIOR VP & CHIEF OPERATING OFFICER (COO), EX-(FRO)/(COI) (2013-10).
John Bendoraitis is responsible for Spirit Airline (SPR)'s Flight Operations, In-flight, Technical Services/Maintenance, Airport Operations, Safety, and Supply Chain/Operations Support departments.
He has been Frontier Airlines (FRO) (COO) since March 2012. John served as President of Comair (COI) from 2008 to 2012 and was President of Compass Airlines from 2006 to 2008.
SCOTT JUSTMANN, SENIOR VP FLIGHT OPERATIONS (2002-03).
GRADY REED, SENIOR VP SAFETY, EX-(NWA) (2002-10).
JOHN PRESTIFILIPPO, SENIOR VP TECHNICAL OPERATIONS, EX-(USA) (2005-10).
John Prestifilippo joined Spirit Airlines (SPR) from US Airways (USA), where he held the position of Senior VP, Maintenance & Engineering. Prior to US Airways (USA), John was at Continental Express Airlines, where he held the position of VP Technical Services & Operations. He also held other senior-level management positions at both Continental Express and Continental Airlines (CAL), including Senior Director Maintenance Technical Operations and Senior Director Base Maintenance. John is a veteran of the United States Air Force (USAF) and attended the University of Maryland, the University of California and Stockton State University. He holds an Airframe and Powerplant (A&P) license.
RENE VISSCHER, SENIOR VP TECHNICAL SERVICES.
MATT KLEIN, SENIOR VP & CHIEF COMMERCIAL OFFICER (CCO) (2016-08).
ROCK WIGGINS, SENIOR VP & CHIEF INFORMATION OFFICER (CIO) (2016-09).
ROBERT MORELAND, GENERAL MANAGER & VP SAFETY.
EDWARD GARDUNO, GENERAL MANAGER.
JYRI STRANDMAN, VP FLIGHT OPERATIONS.
MS CAROL FISCHER, VP CUSTOMER SERVICE.
PATRICK STRASBURGER, VP GROUND OPERATIONS (2001-05).
MS PATRICIA WILLIS, VP LABOR RELATIONS (2005-02).
MS VICTORIA MORELAND, VP PLANNING.
GRAHAM PARKER, VP PRICING & REVENUE MANAGEMENT (2004-11).
BROOKE MAYGER, VP SAFETY & SECURITY.
Brooke joined Spirit (SPR) in 1999 in various roles of increasing responsibility in Spirit (SPR)'s Maintenance organization up to and including VP Technical Services. Brooke, a graduate of Embry Riddle Aeronautical University, has >24 years in Aviation, including 6 years in Operations and 18 years in Maintenance.
MARK KOPCZAK, VP NETWORK PLANNING.
CHARLIE RUE, VP SUPPLY CHAIN.
MS LANIA RITTENHOUSE, VP IN-FLIGHT EXPERIENCE (2015-12).
Lania is formerly VP Product Development at Carnival Cruise Line and VP Hotel Operations at Norwegian Cruise Line. Most recently, Lania served as President of FleetPro Ocean, a leading independent passenger ship management company.
MICHAEL ANDERSON, SENIOR DIRECTOR SAFETY.
MS SAPANA PATEL, SENIOR DIRECTOR SOLUTION DELIVERY & ARCHITECTURE.
JEFFREY CARLSON, DIRECTOR OF OPERATIONS, EX-(NWA) (2006-01).
Jeff Carlson, type-rated on the Airbus (EDS) equipment that (SPR) flies, manages all aspects of Flight Operations including pilot (FC) and cabin attendant (CA) daily operations and training. As Director of Operations, he oversees (SPR)’s relationship with the (FAA) and is the point of contact for regulatory compliance. Carlson came to (SPR) from Northwest Airlines (NWA), where he held the position of Captain/Check Pilot on an A330. He also held various management positions including VP Flight Operations, Managing Director, and Chief Pilot, and Managing Director, Flight Procedures, Training & Standards. Jeff holds a Bachelor of Science degree from Embry Riddle University.
N PAUL BERRY, DIRECTOR OF PUBLIC RELATIONS (PR), ADVERTISING & BRAND.
ROBYN PLATT, SENIOR MANAGER ROUTE PLANNING (SAN DIEGO).