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Spirit Airlines reports a net loss of $103.9 million in the first quarter, partners with Lewis University for new pilot pathway

Spirit Airlines Airbus A320-271N WL N967NK (msn 11128) FLL (Jay Selman). Image: 404290.

Spirit Airlines, Inc. reported first quarter 2023 financial results.

First Quarter 2023 (unaudited)

As Reported

Adjusted1

$(91.3) Million $(89.4) million

Total operating revenues $1,349.8 million $1,349.8 million

Operating income (loss) $(112.4) Million

Operating margin (8.3)% (6.8)%

Net income (loss) $(103.9) million

Diluted earnings (loss) per share $(0.95) $(0.82)

“For the first quarter 2023, our adjusted operating margin came in better than expected, helped by lower fuel and a strong revenue per available seat mile (“TRASM”) performance. Looking ahead to the second quarter, demand continues to be strong and industry capacity remains constrained, both of which are beneficial for unit revenue. Our core business is solid, and the team is doing an excellent job solving for the problems within our control,” said Ted Christie, Spirit’s President and Chief Executive Officer. “Earlier this month, the Fort Lauderdale area experienced severe flash floods, requiring a 40-hour closure of the Fort Lauderdale airport. As a result of this weather event, Spirit canceled disrupting travel plans for a substantial number of our Guests. Despite the significant and out-sized disruption to our network, our team was primed and ready to go on Friday morning once the airport re-opened. This quick recovery is a testament to the diligent efforts of our entire team as well as the innovative changes have put in place to help accelerate recovery operations.”

Fleet

Spirit took delivery of five new A320neo aircraft during the first quarter 2023 and retired four A319ceo aircraft. The Company ended the quarter with 195 aircraft in its fleet, an increase of 10.8 percent since the end of first quarter 2022.

Liquidity and Capital Deployment

Spirit ended first quarter 2023 with unrestricted cash and cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility of $1.7 billion.

Total capital expenditures for the three months ended March 31, 2023, were $86.0 million, primarily related to net outflows of aircraft pre-delivery deposits, expenditures related to the building of Spirit’s new headquarters campus in Dania Beach, Florida and spare parts, including one spare engine.

In other news, Aspiring pilots in the Chicago area can soon soar from a college classroom to the flight deck at Spirit Airlines. The carrier and Lewis University today announced a new partnership to launch the Spirit Wings Pilot Pathway program at the university’s College of Aviation, Science and Technology in Romeoville, Illinois. The program provides graduates with a direct path to a rewarding career flying for Spirit. Lewis University students can gain valuable experience and complete the steps needed to become a Spirit First Officer while attending a leading aviation university and finishing their college degree.

Lewis University students pursuing an aviation technology degree can apply for the program after obtaining a recommendation from a faculty member in the College of Aviation, Science and Technology and completing their sophomore year. If successful in Spirit’s interview process, they will receive a conditional offer of employment, a Spirit Electronic Flight Bag (EFB) and mentorship as they complete their degree and all Federal Aviation Administration (FAA) requirements for a Restricted Airline Transport Pilot (R-ATP) certificate. Graduates who meet all program requirements will join the team as a Spirit First Officer.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N967NK (msn 11128) FLL (Jay Selman). Image: 404290.

Spirit Airlines aircraft photo gallery:

Spirit Airlines aircraft photo gallery

Spirit Airlines reports fourth quarter and full year 2022 results

Spirit Airlines, Inc. reported fourth quarter and full year 2022 financial results.

“I want to thank the entire Spirit Team for their contributions in overcoming the many challenges we faced during 2022. Thanks to their dedication and relentless pursuit to implement more efficient and effective strategies, we made excellent progress on the steps necessary to return Spirit to sustained profitability,” saidTed Christie, Spirit’s President and Chief Executive Officer.

Fourth Quarter 2022 Financial Results

For the fourth quarter 2022, Spirit reported a net loss of $270.7 million, or a net loss of $2.49 per diluted share. Excluding special items, adjusted net income for the fourth quarter 2022 was $12.6 million1, or an adjusted net income of $0.12 per diluted share1.

For the fourth quarter 2022, Spirit reported a pre-tax loss of $340.3 million and a pre-tax margin of negative 24.5 percent. Adjusted pre-tax income for the fourth quarter was $23.0 million1 and adjusted pre-tax margin was 1.7 percent.

Operations

For the fourth quarter 2022, the Company’s load factor was 81.0 percent, DOT on-time performance2 was 73.2 percent and Completion Factor2 was 97.0 percent.

Revenue

Total operating revenues for the fourth quarter 2022 were $1.4 billion, an increase of 43.5 percent compared to the fourth quarter 2019 primarily due to increased flight volume and stronger operating yields. Total revenue per ASM (“TRASM”) was 10.81 cents, up 17.0 percent compared to fourth quarter 2019 on 22.7 percent more capacity.

On a per passenger flight segment basis, compared to the same period in 2019, total revenue per passenger flight segment (“segment”) for the fourth quarter 2022 increased 22.5 percent to $135.62. Compared to the fourth quarter 2019, fare revenue per segment increased 22.1 percent to $64.31 and non-ticket revenue per segment increased 22.9 percent to $71.313. Non-ticket revenue per segment increased sequentially from the third quarter 2022 by $4.24, driven by strong take rates for ancillaries combined with the benefit from revenue management initiatives.

Cost Performance

Total GAAP operating expenses for the fourth quarter 2022 increased 100.8 percent compared to the fourth quarter 2019 to $1,697.0 million. Adjusted operating expenses for the fourth quarter 2022 increased 58.0 percent compared to the fourth quarter 2019 to $1,333.7 million4. Compared to the fourth quarter 2019, these increases were primarily driven by increases in flight volume, additional aircraft, higher fuel prices and inflationary wage pressures.

Fleet

Spirit took delivery of 10 new A320neo aircraft during the fourth quarter 2022. The Company ended the quarter with 194 aircraft in its fleet, an increase of 33.8 percent since the end of fourth quarter 2019.

In January 2023, the Company signed an agreement to sell 29 unencumbered A319ceo aircraft powered with V2500 engines to Gryphon Trading Company, LLC (“Gryphon”), with anticipated deliveries to Gryphon beginning in the first quarter 2023 through the end of the third quarter 2024. The Company expects to remove 14 and 15 A319ceo aircraft from its operating fleet in 2023 and 2024, respectively. The other two A319ceo aircraft in our operating fleet are anticipated to be returned to the lessor upon lease expiration in 2025.

Liquidity and Capital Deployment

Spirit ended fourth quarter 2022 with unrestricted cash and cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility of $1.8 billion.

During the fourth quarter 2022, the Company completed a private offering of an additional $600 million in aggregate principal amount of 8.00% Senior Secured Notes due 2025 (the “Senior Secured Notes”) by Spirit IP Cayman Ltd., an indirect wholly-owned subsidiary of the Company, and Spirit Loyalty Cayman Ltd., an indirect wholly-owned subsidiary of the Company (together the “Issuers”). As of December 31, 2022, the Issuers had $1.1 billion of aggregate principal amount of Senior Secured Notes outstanding.

Spirit increased the commitment under its senior secured revolving credit facility by $60.0 million to $300.0 million during the fourth quarter 2022. As of December 31, 2022, the entire $300 million remained undrawn and available.

Total capital expenditures, including net pre-delivery purchase deposits, for the twelve months ended December 31, 2022, were $246.1 million, primarily related to the purchase of spare parts, including four spare engines, two flight simulators, and expenditures related to the building of Spirit’s new headquarters campus in Dania Beach, Florida.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N967NK (msn 11128) LAX (Michael B. Ing). Image: 960027.

Spirit Airlines aircraft photo gallery: