About Spirit Airlines, Inc.

Ultra low-cost carrier (ULCC) Spirit Airlines operates more than 450 daily flights between major US cities and popular vacation spots in South Florida, the Caribbean, and Latin America, serving nearly 60 destinations. It operates an all Airbus fleet of nearly 95 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.

Operations

Spirit's operations are divided into passenger revenues and non-ticket revenues. Passenger revenues (52% of net sales) are comprised of base fares that customers pay for air travel. Non-ticket revenues (48%) are generated from air travel-related charges for baggage, passenger usage fees (PUF) for bookings, advance seat selections, itinerary changes, hotel and rental car travel packages, and loyalty programs such as its FREE SPIRIT affinity credit card program and $9 Fare Club.

Geographic Reach

The company's route network includes 200 markets served by 59 airports throughout North America, Central America, South America, and the Caribbean. Revenue generated from the US accounts for more than 90% of Spirit's revenue.

Spirit Airlines has its executive offices and headquarters located in a leased facility in Florida. It has additional maintenance operations in leased facilities in Detroit; Chicago; Atlantic City, New Jersey; Dallas; Houston; and Las Vegas, Nevada.

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

Spirit has enjoyed uncharted growth over the years. Revenues jumped 8% from $2.14 billion in 2015 to $2.32 billion in 2016, a historic milestone for the company. The spike in revenue in 2016 was driven by a 3% increase in passenger revenue. Non-ticket revenue also climbed 15% due to a 20% increase in traffic and an increase in baggage revenue per passenger flight segment.

Profits, however, fell 17% from $317 million in 2015 to $265 million in 2016 due a 10% decrease in its average yield that resulted from continued competitive pressures from major US carriers aggressively discounting fare prices. In addition, its cash flow from operations remained static, hovering around the $473 million mark for both 2015 and 2016.

Strategy

To maintain its impressive growth trajectory, Spirit has expanded its fleet. The ultra-low cost carrier ended 2016 with 95 aircraft in its fleet, up from just 45 at the end of 2012. It plans to increase its capacity by another 19% in 2017, growing its fleet to 107 planes by the year-end.

Spirit announced in 2017 it is expanding in midsize cities that have sufficient demand but less competition than big hub markets. Among Spirit's new year-round routes are flights from the important growth market of New Orleans to Baltimore, Cleveland, and Orlando. Like most carriers within its industry, Spirit's top issue is controlling costs in order to sustain a profit from its low fares.

The company has also leveraged 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) 447-7979

Stats

  • Employer Type: Public
  • President, CEO, and Director: Robert L. Fornaro
  • President, CEO, and Director: Robert L. Fornaro
  • Chairman: H. McIntyre Gardner
  • 2016 Employees: 5,742

Major Office Locations

  • Miramar, FL

Other Locations

  • Fort Lauderdale, FL
  • Tampa, FL