Spirit Airlines, Inc. reported its fourth quarter and full year 2017 financial results.
“I want to thank the Spirit family for their contributions throughout 2017. Together, we overcame several major operational challenges while still delivering a record on-time performance,” said Robert Fornaro, Spirit’s Chief Executive Officer. “Looking ahead to 2018, we are focused on finalizing a deal with our pilots union, improving upon our operational reliability, continuing to enhance our guest experience, and delivering earnings growth for our shareholders.”
For the fourth quarter 2017, Spirit’s total operating revenue was $667.0 million, an increase of 15.3 percent compared to the fourth quarter 2016, driven by a 10.4 percent increase in flight volume.
Total revenue per available seat mile (TRASM) for the fourth quarter 2017 decreased 1.8 percent compared to the same period last year, driven by a 2.2 percent decrease in operating yields.
On a per passenger flight segment basis, total revenue for the fourth quarter 2017 increased 1.1 percent year over year to $109.34 driven by non-ticket revenue per passenger flight segment increasing 3.8 percent to $53.91, partially offset by ticket revenue per passenger flight segment decreasing 1.4 percent to $55.43.
For the fourth quarter 2017, total GAAP operating expense, including special items credit of $3.0 million2, increased 16.5 percent, or $81.4 million, year over year to $574.5 million. Adjusted operating expense for the fourth quarter 2017 increased 19.2 percent, or $93.1 million to $577.5 million4. The year-over-year increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume; higher other operating expense, partially driven by increased ground handling rates; higher depreciation and amortization expense; and higher fuel rates.
Aircraft fuel expense increased in the fourth quarter 2017 by 38.5 percent, or $48.7 million, compared to the same period last year, due to a 20.1 percent increase in the cost of fuel per gallon and a 15.5 percent increase in fuel gallons consumed.
Spirit reported fourth quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.20 cents4, a decrease of 4.4 percent compared to the same period last year. The decrease year over year was primarily driven by lower aircraft rent and salaries, wages, and benefits per ASM, partially offset by higher depreciation and amortization per ASM.
“For the full year 2017, our team delivered an adjusted CASM ex-fuel of 5.51 cents, up 1.1 percent year over year. This was an admirable performance considering the hurricanes and other disruptions this year,” said Ted Christie, Spirit’s President and Chief Financial Officer. “Should the tentative agreement with our pilots be ratified, we will gain tools that will allow us to further improve our operational reliability and drive efficiencies, which gives us confidence that we will be able to maintain or grow our relative cost advantage.”
Spirit and its pilots, represented by the Air Line Pilots Association, reached a tentative agreement in January 2018 with the assistance of the National Mediation Board. The tentative agreement is subject to ratification.
Spirit took delivery of four new A321ceo aircraft and two new A320ceo aircraft and returned one leased A321ceo aircraft during the fourth quarter 2017, ending the quarter with 112 aircraft in its fleet.
During the fourth quarter and full year 2017, Spirit returned approximately $45 million to shareholders by repurchasing 1.2 million shares under our share repurchase program.
Recent New Service Announcements
Columbus, Ohio – Orlando (02/15/2018)
Columbus, Ohio – Fort Lauderdale (02/15/2018)
Columbus, Ohio – Las Vegas (02/15/2018)
Columbus, Ohio – Fort Myers (02/15/2018)**
Columbus, Ohio – Tampa (02/16/2018 )**
Richmond – Orlando (03/15/2018)
Richmond – Fort Lauderdale (03/15/2018)
Baltimore – Montego Bay (03/22/2018)
Baltimore – Denver (03/22/2018)
Columbus, Ohio – New Orleans (03/22/2018)*
Fort Lauderdale – Guayaquil, Ecuador (03/22/2018)
Columbus, Ohio – Myrtle Beach (03/23/2018)*
Fort Lauderdale – Cap-Haïtien, Haiti (04/12/2018)
Fort Lauderdale – Seattle (04/12/2018)*
Minneapolis – Myrtle Beach (04/12/2018)*
Orlando – Las Vegas (04/12/2018)
Tampa – Los Angeles (04/12/2018)
Tampa – Las Vegas (04/12/2018)
Seattle – Chicago (04/12/2018)*
Seattle – Dallas/Ft. Worth (04/12/2018)*
Seattle – Minneapolis/St. Paul (04/12/2018)*
Atlantic City – New Orleans (04/13/2018)
Detroit – Portland, Oregon (04/23/2018)*
Detroit – San Diego (04/23/2018)*
* Seasonal Summer Service
** Seasonal Winter Service
Full Year 2017 Highlights