The ultra-low-cost carrier Spirit Airlines has issued its fourth quarter and full year 2018 financial results report today.
The carrier had a net income for the fourth quarter or $91.9 million ), or $94.7 million excluding special items. Net income for the full year 2018 was $155.7 million, or $300.9 million excluding special items. Spirit ended 2018 with unrestricted cash, cash equivalents, and short-term investments of $1.1 billion.
“Our robust fourth-quarter profit closes out a very successful year for Spirit. Despite cost pressures from significantly higher fuel and pilot wage rates, Spirit produced strong earnings growth for 2018, made great strides in improving our customer satisfaction metrics and delivered excellent operational performance. As measured by the Department of Transportation, for the full year 2018, we achieved a record on-time performance of 81.1 percent and a completion factor of 99.1 percent. Based on preliminary estimates, these results earned us the rank of fourth among the reporting marketing carriers in both these categories. In 2018, our initiatives to drive both passenger and ancillary revenue produced healthy top-line revenue growth, and we expect them to drive additional benefit in 2019. Our revenue initiatives, together with our continued strong cost and operational performance position us well to succeed in the year ahead,” said Ted Christie, Spirit’s President and Chief Executive Officer.
Revenue Performance
For the fourth quarter 2018, Spirit's total operating revenue was $862.8 million, an increase of 29.5 percent compared to the fourth quarter 2017. Total operating revenue per available seat mile ("TRASM") for the fourth quarter 2018 increased 11.4 percent compared to the same period last year. During the fourth quarter 2018, the Company's results continued to benefit from its improved yield management processes, non-ticket revenue initiatives, strategic network re-orientation, and a strong operating environment.
On a per passenger flight segment basis, total revenue for the fourth quarter 2018 increased 7.3 percent year over year to $117.15 with fare revenue per passenger flight segment increasing 9.3 percent to $60.45 and non-ticket revenue per passenger flight segment increasing 5.2 percent to $56.702.
Cost Performance
For the fourth quarter 2018, total GAAP operating expenses, increased 26.4 percent year over year to $726.7 million. Adjusted operating expenses for the fourth quarter 2018 increased 25.2 percent year over year to $723.4 million3. These changes were primarily driven by increases in salaries, wages and benefits, fuel rates, and depreciation and amortization.
Aircraft fuel expense increased in the fourth quarter 2018 by 31.1 percent year over year, due to a 14.7 percent increase in the cost of fuel per gallon and a 14.4 percent increase in fuel gallons consumed.
Spirit reported fourth quarter 2018 cost per available seat mile ("ASM"), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.49 cents3, an increase of 5.6 percent compared to the same period last year, primarily due to higher salaries, wages and benefits per ASM largely driven by rate increases pilots received in connection with the new collective bargaining agreement that became effective March 1, 2018. This increase was partially offset by lower aircraft rent per ASM.
“I want to congratulate and thank our entire team for delivering industry-leading cost performance during 2018. Despite absorbing materially higher pilot rates in connection with our new pilot agreement ratified in the first quarter 2018, our adjusted CASM ex-fuel for the full year 2018 was down 3.8 percent year over year. We remain confident that over the next five years our relative cost performance versus our primary competitors will continue to increase, further strengthening our competitive position,” said Scott Haralson, Spirit's Chief Financial Officer.
Fleet
Spirit took delivery of seven new aircraft (five new A320ceo and two A320neo) during the fourth quarter 2018, ending the year with 128 aircraft in its fleet.
New Routes
Orlando - Aguadilla, Puerto Rico (10/04/2018)
Orlando - Guatemala City, Guatemala (10/04/2018)
Orlando - Panama City, Panama (10/04/2018)
Orlando - Santo Domingo, Dominican Republic (10/04/2018)
Orlando - San Jose, Costa Rica (10/05/2018)
Orlando - San Pedro Sula, Honduras (10/05/2018)
Orlando - San Salvador, El Salvador (10/06/2018)
Fort Lauderdale - Kansas City (11/08/2018) *
Newark - Santo Domingo (11/08/2018) *
Orlando - Bogotá, Colombia (11/08/2018)
Orlando - St. Thomas, USVI (11/08/2018)
Orlando - Medellín, Colombia (11/09/2018)
Orlando - Cartagena, Colombia (11/10/2018)
Orlando - Myrtle Beach (11/10/2018)
Philadelphia - Fort Myers (12/13/2018) *
Philadelphia - Tampa (12/14/2018) *
Cali, Colombia - Fort Lauderdale (12/20/2018)
Jacksonville - Detroit (12/20/2018)
Jacksonville - Chicago (12/20/2018)
Detroit - Montego Bay (12/20/2018)
Detroit - West Palm Beach (12/21/2018) *
* Indicates seasonal service
Full Year 2018 Highlights
As measured by the Department of Transportation, achieved a record high on-time performance ranking fourth in on-time arrivals among the reportable carriers based on preliminary results.
Named "Value Airline of the Year" by Air Transport World, named the " Most Improved Airline of the Year" by the Airline Passenger Experience Association, and ranked as the country's most on-time Low-Cost airline by FlightGlobal.
Launched a major International expansion from Orlando International Airport to 12 destinations in Latin America and the Caribbean.
Launched service to the following new destinations: Columbus; Richmond; Guayaquil, Ecuador; Cap-Haïtien, Haiti; St. Croix, U.S. Virgin Islands; Greensboro; Asheville; Cali, Colombia; and Jacksonville.
Ratified a new five-year agreement with its pilots, represented by the Air Line Pilots Association.
Ratified a new five-year agreement with its dispatchers, represented by the Professional Airline Flight Control Association. 
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