Posted on: 29 April 2014 by Mark Howells
Spirit Airlines has reported its first quarter 2014 (1Q14) financial results, with adjusted net income up 15.4% to $37.8 million compared with $32.8 million in the first quarter of 2013 (1Q13).
GAAP net income for 1Q14 was $37.7 million compared with $30.6 million in the first quarter 1Q13 and for 1Q14, Spirit achieved an adjusted pre-tax margin of 13.7% compared with 14.4% over the same period in 2013. On a GAAP basis, pre-tax margin for 1Q14 was 13.7% compared with 13.4% in 1Q13.
Spirit ended 1Q14 with $544.0 million in unrestricted cash. The company’s return on invested capital (before taxes and excluding special items) for the twelve months ended 31 March 31, 2014 was 31.2%.
“During the first quarter, our team did a great job serving our customers while overcoming the challenges caused by numerous severe winter storms and managing the new crew duty and rest rules,” observed Ben Baldanza, Spirit’s chief executive officer. “Our solid operational and financial performance in the first quarter is a great start to the year and provides a firm foundation as we grow our business and bring our low fares to more people in more places.”
For 1Q14, Spirit's total operating revenue was $438.0 million, an increase of 18.2% over 1Q13. The increase was primarily driven by the growth in flight volume. In 1Q14, Spirit had 256 weather-related flight cancellations compared with 59 in 1Q13, which negatively impacted revenue for the quarter.
Total revenue per available seat mile (RASM) for 1Q14 was 11.57 cents, a decrease of 2.4% compared with 1Q13. Average stage length for the first quarter 2014 increased 6.3% year over year, contributing an estimated 3.0 percentage point decline in RASM. In 1Q14, RASM was further impacted by an estimated 1.5 percentage points due to the calendar shift of Easter occurring in April this year rather than in March as it was last year.
Total operating expenses for 1Q14 increased 17.9% year over year to $378.0 million on a capacity increase of 21.0%. Spirit reported 1Q14 cost per available seat mile excluding special items and fuel (Adjusted CASM ex-fuel) of 6.06 cents, an increase of 0.3% compared with the same period last year. An increased number of scheduled maintenance events resulted in higher depreciation and amortization expense and higher maintenance, material and repairs expense per ASM. These expenses were partially offset by improved operational reliability, resulting in lower passenger re-accommodation expense (recorded within Other operating expense) per ASM. The company also benefited from lower aircraft rent per ASM.