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Published on : Tuesday, February 9, 2016
“I want to thank and congratulate our Spirit team members for successfully delivering solid financial results in 2015. Although increased industry capacity and aggressive competitive pricing pressured our unit revenues, our excellent cost execution and ability to adapt to a changing environment drove improved year-over-year results,” said Bob Fornaro, Spirit’s Chief Executive Officer. “I am excited to lead this innovative team. As CEO, I plan to improve upon the already very strong base of fundamentals that Spirit possesses with a focus on continuing to improve operational reliability and customer service, and maintaining our financial discipline to drive value for all of Spirit’s stakeholders.”
For the fourth quarter 2015, Spirit’s total operating revenue was $519.8 million, an increase of 9.6 percent compared to the fourth quarter 2014, driven by an increase in flight volume, partially offset by a decrease in operating yields.
Total revenue per passenger flight segment (“PFS”) for the fourth quarter 2015 decreased 12.6 percent year over year to $111.78, primarily driven by a 21.4 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pricing pressures as well as a higher percentage of Spirit’s markets being under development compared to the same period last year. Non-ticket revenue remained stable, declining only 0.8 percent year over year on a per flight segment basis to $54.26.
Adjusted operating expenses for the fourth quarter 2015 increased 5.6 percent to $401.2 million3. GAAP total operating expenses increased 3.9 percent year over year to $399.5 million. Operating expenses benefited from fuel expense decreasing 23.8 percent, or $32.8 million, on a fuel volume increase of 27.9 percent.
Spirit reported fourth quarter 2015 cost per available seat mile (“ASM”) excluding special items and fuel (“Adjusted CASM ex-fuel”)3 of 5.15 cents, a decrease of 8.2 percent compared to the same period last year, driven primarily by lower aircraft rent per ASM and lower labor expense per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft. Labor expense per ASM in the fourth quarter 2015 was lower compared to the same period last year primarily due to scale benefits from overall growth and from larger gauge aircraft. These decreases were partially offset by higher depreciation and amortization expense related to the depreciation of aircraft.
“Spirit’s cost performance in the fourth quarter and throughout 2015 should be a source of pride for all our team members,” said Ted Christie, Spirit’s Chief Financial Officer. “Our ultra-low cost structure is the foundation of our competitive advantage, providing us the platform to define our future.”
Spirit took delivery of three new A321ceo aircraft during the fourth quarter 2015.
Full Year 2015 Highlights
Tags: Spirit Airlines