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Published on : Thursday, July 27, 2017
GAAP net income for the second quarter 2017 was $78.1 million, or $79.1 million 1 excluding special items.
GAAP operating margin for the second quarter 2017 was 18.9 percent, or 19.1 percent excluding special items1.
Spirit ended the second quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $969.6 million.
Spirit’s return on invested capital for the twelve months ended June 30, 2017 was 20.3 percent2.
“The progress we made with our revenue initiatives, as well as the underlying revenue trends as we headed into the June quarter, were encouraging. Unfortunately, given the level of operational disruptions and the associated financial impact, the second quarter 2017 performance overall was disappointing. We sincerely apologize to our customers who were affected by the flight disruptions during the quarter,” said Bob Fornaro, Spirit’s President and Chief Executive Officer. “Despite our financial and operational challenges in the second quarter 2017, the changes in our pricing and revenue management strategies helped to drive year-over-year improvement in passenger and non-ticket revenue per segment — this is the first time in over two and a half years either of these metrics increased year over year.”
For the second quarter 2017, Spirit’s total operating revenue was $701.7 million, an increase of 20.1 percent compared to the second quarter 2016, driven by a 9.3 percent increase in flight volume and a 7.1 percent increase in operating yields.
Total revenue per available seat mile (TRASM) for the second quarter 2017 increased 5.7 percent compared to the same period last year. During the second quarter 2017, the Company’s results benefited from the calendar shift of Easter, as well as Company driven revenue initiatives and a strong underlying demand environment.
On a per passenger flight segment basis, total revenue for the second quarter 2017 increased 8.5 percent year over year to $113.07 with ticket revenue per passenger flight segment increasing 13.4 percent to $59.93 and non-ticket per passenger flight segment increasing 3.5 percent to $53.14.
For the second quarter 2017, total GAAP operating expense, including special items of $1.5 million3, increased 23.1 percent, or $106.6 million, year over year to $568.9 million. Adjusted operating expense for the second quarter 2017 increased 25.1 percent, or $113.7 million to $567.5 million4. The increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume, higher passenger re-accommodation expense (recorded within other operating expenses), and higher fuel rates.
Aircraft fuel expense increased in the second quarter 2017 by 25.7 percent, or $29.1 million, compared to the same period last year, due to a 12.9 percent increase in the cost of fuel per gallon and a 11.1 percent increase in fuel gallons consumed.
Spirit reported second quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.83 cents4, an increase of 10.0 percent compared to the same period last year, driven primarily by higher passenger re-accommodation expense per ASM and higher depreciation and amortization per ASM.