• Joe Breitfeller

Spirit Airlines Reports First Quarter Net loss of $112 Million on 40% Revenue Decline to $461 M

Spirit Airlines has reported a first quarter net loss of $112 million or ($1.15) per diluted share on a 40 percent decline in revenue to $461 million compared to the first quarter of 2020. The carrier ended the quarter with $1.9 billion in available liquidity.

Spirit Airlines Airbus A320neo - Courtesy Airbus

On Wednesday (April 21, 2021), Spirit Airlines, Inc. reported their first quarter 2021 financial results. The carrier reported a first quarter GAAP net loss of $112 million or ($1.15) per share on a revenue decline of 40 percent to $461 million versus the first quarter of 2020. For Q1, Spirit’s total revenue per passenger segment decreased year-over-year 16.2 percent to $84.27, while fare revenue per segment declined 24.2 percent to $31.84 and non-ticket revenue per segment decreased 10.8 percent to $52.43. For most of March 2021, Spirit’s average non-ticket revenue per segment improved to over $55.00. At March 31, 2021, Spirit Airlines had a total of $1.9 billion in cash, cash equivalents, short-term investment securities and liquidity available under the company’s revolving credit facility.

In Wednesday’s announcement, Spirit Airlines’ President and Chief Executive Officer, ted Christie, said,

We were very pleased to see how well both our domestic and international network performed as demand strengthened in the last few weeks of the quarter. This strength, along with improvement in forward bookings, drove positive cash from operations for the full first quarter 2021 even when excluding the payroll support program funds received. Assuming these trends continue, we believe we can achieve a positive Adjusted EBITDA margin for the full year 2021. While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability.”

Spirit’s first quarter load factor was down 26.9 percent to 72.1 percent compared to Q1 2020. The company’s total GAAP operating expenses for the quarter decreased year-over-year by 32 percent to $563.8 million, primarily attributable to the grant portion of U.S. Treasury Payroll Support Program (PSP) funding. Spirit’s adjusted Q1 operating expenses decreased 11.5 percent versus the same period last year to $733.5 million.

Also commenting on the carrier’s financial results, Spirit Airlines’ Chief Financial Officer, Scott Haralson, added,

“Our first quarter 2021 Adjusted EBITDA margin of negative 43.3 percent was better than we initially expected due to both revenue and non-fuel operating expense coming in at the better end of our range. Since the beginning of March 2021, demand trends have been progressively improving. Assuming these trends continue, we estimate our second quarter 2021 Adjusted EBITDA margin will be between negative 5 percent to breakeven, assuming a fuel price per gallon of $1.95. With our industry-leading low cost structure, we remain confident that the strength of our business model will allow us to fully capitalize on the growth potential ahead of us and drive sustainable, long-term value for our shareholders.”

Spirit Airlines' First Quarter 2021 Financial Results - Courtesy Spirit Airlines

During the first quarter, Spirit took delivery of two new Airbus A320neos which were financed through direct operating leases and the company also purchased two off-lease Airbus A319ceos. At March 31, 2021, Spirit’s fleet included 159 aircraft. The carrier’s total CAPEX for the first quarter was approximately $92 million, primarily related to pre-delivery aircraft deposits and the purchase of the previously mentioned off-lease aircraft. On March 12, 2021, Spirit amended and increased their existing Senior Secured Revolving Credit Facility by $60 million to $240 million, with an extended maturity date to March 30, 2022. At the end of the first quarter, the additional $60 million was undrawn.

Miramar, Florida-based low-cost carrier Spirit Airlines (NYSE: SAVE) is committed to offering the best value in the sky with service to destinations in the U.S., Latin America, and the Caribbean. The airline allows customers to select and pay for only the products and services they want, something they call “À La Smarte.” Spirit also operates one of the youngest and most fuel-efficient fleets in the U.S. The carrier proudly calls their youthful fleet of aircraft their “Fit Fleet®.” In trading Thursday Morning (April 22, 2021), shares in Spirit Airlines, Inc. were 3.53% higher at $37.29/share (11:34 AM EDT).

Source: Spirit Airlines