Spirit Airlines, Inc.

Spirit Airlines can lift the spirits of people seeking sunshine. The ultra low-cost carrier (ULCC) operates more than 280 daily flights between major US cities and popular vacation spots in South Florida, the Caribbean, and Latin America, serving nearly 50 destinations. It operates an all Airbus fleet of nearly 55 single-aisle aircraft, including A319s, A320s, and A321s. Spirit capitalizes on an ancillary service model, charging separately for baggage, advance seat selection, and other travel-related upgrades. In addition to scheduled service, the company partners with third-party vendors to offer a slate of vacation packages via its website.

Geographic Reach

Spirit's largest maintenance facility is stationed in a leased facility at FLL under a lease that expires in January 2015. It also conducts additional maintenance operations in leased facilities in Detroit; Chicago; Atlantic City, New Jersey; Dallas; and Las Vegas. Revenue generated from the US accounts for nearly 90% of Spirit's revenue.

Sales and Marketing

Spirit Airlines sells through its website, an outsourced call center, and third-party travel agents. Its spirit.com site accounts for about two-thirds of sales.

Financial Performance

With the Great Recession that decimated the airline industry far behind it, Spirit is enjoying uncharted growth over the years. Revenues jumped 25% from $1.32 billion in 2012 to $1.65 in 2013, a historic milestone for the company. The spike in revenue in 2013 was driven by a 26% increase in passenger revenue. Non-ticket revenue also climbed by 25% due to a 24% increase in traffic and an increase in baggage revenue per passenger flight segment.

Profits also surged 63% from $108 million in 2012 to peak at a record-shattering $177 million in 2013 due to the higher revenue and decreased increase expenses. While its cash flow from operations has fluctuated a bit over the last few years, it increased by $82 million in 2013 due to larger operating profits and a slightly higher air traffic liability driven by higher capacity and future bookings.

Strategy

To maintain its impressive growth trajectory, Spirit is expanding its city destination network while also concentrating its resources on the growing Caribbean and Latin American markets. Like most carriers within its industry, Spirit's top issue is controlling costs in order sustain a profit from its low fares.

To this end, the company has moved to an aggressive unbundling strategy to stimulate passenger demand and revenues. Unbundling allows passengers to pay separately for products and services that they want to use. Charging for such extras as onboard beverages and snacks enables Spirit to offset its low ticket prices as well as maintain its competitive market presence.

 

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Spirit Airlines, Inc.


2800 Executive Way
Miramar, FL 33025-6542
Phone: 1 (954) 447-7920
Fax: 1 (954) 4477979
www.spirit.com

STATS


  • Employer Type: Public
  • Stock Symbol: SAVE
  • Stock Exchange: NASDAQ
  • President and Chief Executive Officer: B. Ben Baldanza
  • Chief Financial Officer; Senior Vice President: Edward Christie
  • Chairman: Bill Franke

Major Office Locations

  • Miramar, FL

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