Ultra-low-cost carrier Spirit Airlines reported its fourth quarter and full-year financial results on Monday. Amid a brutal end to the year, the airline reported a loss of nearly $300 for Q4 2022.
When it comes to operating income, Spirit lost more than $300 million, according to the financial report. The carrier blamed a slew of weather-related flight cancelations during the peak holiday period for its performance.
Inside the numbers
In the fourth quarter, Spirit confirmed a net loss of $270.7 million, equivalent to a net loss of $2.49 per diluted share. Adjusted net income for Q4 was $12.6 million, or an adjusted net income of $0.12 per diluted share, according to the report.
The airline’s President and CEO, Ted Christie, thanked employees for navigating the challenges that came about last year.
“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.” – Ted Christie, Spirit Airlines President and Chief Executive Officer
The carrier also reported a pre-tax loss of $340.3 million and a pre-tax margin of negative 24.5% for Q4 2022. Spirit said its adjusted pre-tax income for the fourth quarter was $23.0 million, and its adjusted pre-tax margin was 1.7 %.
Here is a breakdown of the airline’s overall Q4 performance, as reported versus adjusted:
As Reported | Adjusted | |
|---|---|---|
Total operating revenues | $1,391.3 million | $1,391.3 million |
Operating income (loss) | $(305.7) million | $57.6 million |
Operating margin | (22.0)% | 4.1% |
Net income (loss) | $(270.7) million | $12.6 million |
Diluted income (loss) per share | $(2.49) | $0.12 |
Operating revenue
Operating revenueSpirit’s operating revenues amounted to $1.4 billion, an increase of 43.5% compared to the fourth quarter of 2019. The airline said the improved number was primarily due to increased flight volume and more substantial operating yields. In addition, the airline’s total revenue per available seat mile (TRASM) was 10.81 cents, an increase of 17% compared to Q4 2019, noting 22.7% more capacity.
“Leisure demand has remained strong and our team is doing a great job maximizing revenue production,” Christie explained. “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.”
Aircraft utilization
The carrier also reported its aircraft utilization results for the fourth quarter, showing a slight decrease compared to three years prior. Airplane utilization amounted to 10.8 hours, which was down 7.7% compared to the 11.7 hours recorded in 2019 during the same period.
Although the utilization rate was down, Spirit noted it was a sequential improvement from Q3 2019, which was 1.9 %. According to the report, the continued constraints on flights to and from Florida and staffing challenges limited the airline’s ability to optimize its network and operate its fleet at full utilization in the fourth quarter of 2022.
Photo: Vincenzo Pace | Simple Flying
Spirit’s Chief Financial Officer, Scott Haralson, said the airline is steadily building back fleet utilization.
“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,” Haralson said. “These issues, together with Airbus aircraft delivery delays, have led us to be more conservative with our capacity planning assumptions for 2023.”
Spirit took delivery of 10 new Airbus A320neo aircraft during Q4 2022. The ultra-low-cost airline ended the quarter with 194 aircraft in its fleet, an increase of 33.8 % since the end of the fourth quarter of 2019.
