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About Spirit Airlines, Inc.

Ultra-low-cost carrier Spirit Airlines operates more than 600 daily flights between major US cities and popular vacation spots in South Florida, the Caribbean, and Latin America, serving more than 75 destinations. The airline operates an all-Airbus fleet of about 145 single-aisle aircraft in the A320 family. Spirit Airlines capitalizes on an ancillary service model, charging separately for baggage, advanced 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. Domestic markets account for the majority of the company's sales.

Operations

Spirit Airlines' operations are divided into passenger revenue and other revenue. Passenger revenue (more than 95% of net sales) consists of base fares that customers pay for air travel, while non-fare revenue is generated from air travel-related services, such as baggage, passenger usage fees, advanced seat selection, itinerary changes, and loyalty programs. Other revenue (not more than 5%) consists of the sale of frequent flyer miles to credit card partners and commissions from the sale of various items such as hotel and rental car bookings.

Geographic Reach

Spirit Airlines' route network includes about 320 markets served by more than 75 airports throughout the US, Latin America, and the Caribbean; revenue generated from US travel accounts for approximately 90% of its revenue while Latin America and the Caribbean account for the remaining 10%.

The company's executive offices and headquarters are located in a leased facility in Miramar, Florida. It has additional maintenance operations in about 10 other leased facilities across the US.

Sales and Marketing

Spirit Airlines' customers are primarily leisure travelers who are paying for their own ticket (vs. a corporate expense account) and who make their purchase decision based largely on price. The airline sells through its website, third-party travel agents, and an outsourced call center. Its spirit.com site accounts for more than two-thirds of the company's sales. Over 25% are made through travel agencies and the call center accounts for over 5%.

Financial Performance

Spirit Airlines has enjoyed steady growth over the last several years and in 2019, the company posted its thirteenth consecutive year of profitability.

Operating revenues increased by $507.5 million, or 15.3%, to $3,830.5 million in 2019 compared to 2018, primarily due to an increase in traffic of 15.1%, and a slight increase in average yield of 0.2%, year over year.

Profits, rose to $335.2 million in 2019 compared with $155.7 million the previous year. The increase was mostly due to its income before taxes more than doubling compared to the previous year.

Cash at the end of fiscal 2019 was $979 million, a decrease of $25.8 million from the prior year. Cash from operations contributed $409.2 million to the coffers, while investing activities used $314.8 million, mainly for purchases of property and equipment. Financing activities used $120.2 million primarily from the payments on debt obligations.

Strategy

Spirit Airlines' no-frills strategy features no premium class and no specialty clubs. It follows an aggressive unbundling model to stimulate passenger demand and revenues. Unbundling allows passengers to pay separately for products and services they use. Charging for such extras as onboard beverages and snacks enables Spirit Airlines to offset its low ticket prices as well as maintain its competitive market presence.

Its growth strategy includes acquiring additional aircraft, increasing the frequency of flights and size of aircraft used in markets it currently serves, and expanding the number of markets it serves where its low cost structure would likely be successful.

In 2019, the company began the process of upgrading its enterprise accounting software. This project was suspended in the third quarter of 2019 and has been elected to re-evaluate and pursue the optimal solution. In addition, the company implemented a new website built on a more stable codebase which provides for a better user experience. In addition, it invested in improving the stability of its mobile application.

To maintain its impressive growth trajectory, Spirit Airlines continues to expand its network and fleet. In 2018, the carrier added 16 Airbus single-aisle aircraft and nine new destinations, including Haiti, St. Croix in the US Virgin Island, Ecuador, Colombia, and additional cities in Ohio, Virginia, North Carolina, and Florida.

Company Background

Spirit Airlines was founded in 1964 as Clippert Trucking Company in Michigan. It began air charter operations in 1990 and was renamed Spirit Airlines, Inc. in 1992. In 1994, it reincorporated in Delaware, and in 1999 relocated its headquarters to Miramar, Florida.

Spirit Airlines, Inc.

2800 Executive Way
Miramar, FL 33025-6542
Phone: 1 (954) 447-7920

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: SAVE
Stock Exchange: , NYSE
President and Director: Edward M. Christie
CEO and Director: Robert L. Fornaro
Chairman: H. McIntyre Gardner
Employees (This Location): 600
Employees (All Locations): 8,938

Major Office Locations

Miramar, FL

Other Locations

Fort Lauderdale, FL
Tampa, FL
Detroit, MI
Dallas, TX