Spirit Airlines’ profit falls on Superstorm Sandy impact
Superstorm Sandy and growing pains impacted Spirit’s bottom line during the fourth quarter. However, whether you like the airline’s business model or not from a consumer perspective, it is proving to be successful.
Spirit Airlines saw its net income dive 18.4% to $19.5 million as Superstorm Sandy took a $25 million bite out of revenue, the airline reported.
The bottom line was also impacted by fuel-cost and capacity increases.
Operating revenue for the quarter increased 19.8% to $328.3 million.
CEO Ben Baldanza said Spirit remains committed to its ancillary revenue strategy, which has the airline charging for everything from bags to overhead bin space.
“2012 was a very exciting year for Spirit,” Baldanza said. “We successfully grew our business, delivered strong financial results and remained committed to our low-cost, low-fare strategy. This low-cost, low-fare strategy helped us to achieve among the highest margins in the industry.”
Revenue per available seat mile in the fourth quarter fell 6.6% to 11.1 cents. The decrease was driven by the impact of the storm, and a 5.3% jump in average stage length, the airline said.
Net income for full-year 2012 increased 41.9% to nearly $108.5 million as operating revenue hit $1.3 billion, a 23.1% increase.
Operating expenses for the fourth quarter and full-year 2012 climbed 25.6% and 23.5%, respectively, driven by increased fuel costs and capacity increases.