LONDON – JetBlue owned, Spirit Airlines has released both its Quarter four and full year 2022 financial reports. As with many airlines it was a year that was not without its hurdles.
The fourth quarter alone saw a net loss of $270.7 million, translating into an adjusted net income excluding special items of $12.6 million.
“I want to thank the entire Spirit Team for their contributions in overcoming the many challenges we faced during 2022.”
“Thanks to their dedication and relentless pursuit to implement more efficient and effective strategies, we made excellent progress on the steps necessary to return Spirit to sustained profitability,” said Ted Christie, Spirit’s President and Chief Executive Officer.
During the year Spirit added nine additional North American destinations to its route network. From a performance perspective their load factor came in at 81%, on-time performance was 73.2% and completion factor 97%.
Revenues and Expenses
Operating revenues increased 43.5% when compared to Q4 in 2019, to $1.4 billion, this predominately owing to increased flight volumes and stronger operating yields.
Operating expenses rose over 100% to $1.697 billion compared to 2019, driven by additional operational aircraft, an increase in flight volume and higher fuel prices.
The operating expenses came in under the forecasts outlined by Spirit during December 2022, this was due to reduced airport rents and landing fees driven by operating expenses and revenue share adjustments at the various airports Spirit serves.
Christie also intimated that the appeal from leisure travellers is there to sustain operations going forward into the new year by saying: ”Leisure demand has remained strong and our team is doing a great job maximizing revenue production.”
Challenges
“In the fourth quarter 2022, despite a significant number of weather-related flight cancellations during the peak holiday period, our team delivered better-than-expected unit revenue performance.”
“In fact, when adjusting for capacity increases, our unit revenue performance in the fourth quarter was amongst the best in the industry, when compared to 2019,” CEO Christie concluded.
Aircraft utilisation for the fourth quarter was 10.8 hours which is 7.7% down on the same period in 2019, but an increase of 1.9% from the previous quarter.
The well documented issues around the state of Florida’s air traffic control, and the staffing bottleneck Spirit claim it is causing, is having an impact on Spirit’s bottom line.
These problems saw Spirit cut 7 routes from their network out of Florida during November 2022 which has had a direct effect on the low-cost carriers aircraft utilisation.
Spirits Chief Financial Officer, Scott Haralson said: ”Our team did a great job navigating the various challenges in 2022 and closed the year with better-than-expected results,”
“Despite some unexpected setbacks with Geared Turbo Fan (“GTF”) engine availability issues, a continued stressed industry infrastructure, and other issues, we have been steadily building back to full fleet utilization and are on track to be close to full fleet utilization by the end of 2023.”
“These issues, together with Airbus aircraft delivery delays, have led us to be more conservative with our capacity planning assumptions for 2023.”
“We now anticipate full year 2023 capacity will be up 19 percent to 22 percent compared to 2022 and that our 2023 CASM ex-fuel will fall in the high 6-cent range, which includes approximately 30 basis points of cost pressure related to the recently ratified pilot contract.”
Financial Position
Spirit increased its commitment to its senior secured revolving credit facility by $60 million to $300 million, at the end of December 2022, this facility was still fully available and unused as yet.
Its total capital expenditure for the full year were $246.1 million, which covered spare parts, 4 spare engines two flight simulators and the setup of a new headquarters in Dania Beach, Florida.
During Q4, Spirit took delivery of ten new A320neo jets which takes its overall fleet number to 194. This will then reduce some, as in January 2023 the company agreed to sell 29 A319ceo aircraft to aviation leasing specialist Gryphon Trading Company.
The sale of these aircraft will take place over a period of approximately 18 months between Q1 2023 and Q3 2024.
