Spirit Airlines, net income $81.4M in Q3 2016
Spirit Airlines, a US LCC, reported that the GAAP net income for the third quarter of 2016 was $81.4 million ($1.17 per diluted share), or $86.3 million ($1.24 per diluted share) excluding special items.
GAAP operating margin for the third quarter of 2016 was 21.8%, or 23% excluding special items. The airline ended the third quarter of 2016 with unrestricted cash, cash equivalents, and short-term investments of $926.0 million.
At the same time, Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended on the 30th of September 2016 was 25.3%.
Bob Fornaro, Spirit's President and Chief Executive Officer , said: "During the third quarter 2016, we saw sequential improvement in total revenue directly related to our own revenue initiatives as well as a modest improvement in the industry pricing environment, and are encouraged by the constructive trends we are seeing."
For the third quarter 2016, Spirit's total operating revenue was $621.3 million, an increase of 8.1% compared to the third quarter 2015, driven by a 12.6% increase in flight volume and 0.8% increase in load factor, partially offset by a decrease in operating yields.
Total revenue per available seat mile (TRASM) for the third quarter 2016 decreased 7% year over year, primarily driven by a decrease in passenger yield as a result of industry competitive pricing pressures. Although yields decreased YoY, throughout the third quarter 2016, the company saw sequential improvement in the rate of decline.
On a per passenger flight segment (PFS) basis, total revenue per PFS for the third quarter 2016 decreased 9%, or $10.84 YoY, to $109.51, primarily driven by a 12.9%, or $8.62, decrease in ticket revenue per PFS related to industry competitive pricing pressures. Non-ticket revenue declined 4.2%, or $2.22, YoY on a per PFS basis to $51.17, primarily driven by a modest decline in bag revenue per PFS.
Total GAAP operating expenses, including special items of $7.8 million primarily related to lease termination charges, increased 16.4%, or $68.5 million, YoY to $486.1 million driven by an increase in flight volume. Adjusted operating expense for the third quarter 2016 increased 14.6%, or $61 million, to $478.3 million on a capacity increase of 16.2% YoY.
During the third quarter 2016, Spirit took delivery of 2 new A321ceo aircraft, ending the quarter with 89 aircraft in its fleet. Also, during the quarter, Spirit purchased three A319 aircraft off lease and extended the leases for two other A319 aircraft.
During the third quarter 2016, Spirit also returned $38 million to shareholders by repurchasing approximately 0.9 million shares. Year to date Spirit has returned $100 million to shareholders by repurchasing approximately 2.3 million shares.
True scale of COVID-19 pandemic: $17.45 billion losses per month
Since March 2020, airlines have been fighting a battle against all odds. Even with the industry exhibiting some signs of...
BAA Training Vietnam Turns One: Road to Success
Success usually comes to those who put big efforts, take initiatives, and make bold decisions. These ingredients are als...
Trembling Fortress: Accelerating Shifts in Aircraft Leasing
On the first days of March 2020, the aviation leasing market was still expecting to reach $285.5 billion worth by 2026....
Greenpeace to sue Dutch government over KLM bailout
Greenpeace will take legal action against the Dutch government, accused of bailing out the airline KLM with 3.4 billion...
Brazil proposes a $376 million injection to Azul Airlines
Azul Airlines, a Brazil-based carrier, received an injection proposal from the Brazilian government that could dilute it...