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Spirit Airlines Reports Fourth Quarter Net Loss of $157 Million, Full Year 2020 Net Loss of $429 M

The Florida-based airline reported a fourth quarter net loss of $157 million or ($1.61) per diluted share on a 49 percent revenue decline to $498 million, and a full year net loss of $429 million or ($5.06) per share on a year-over-year revenue decline of 53 percent to $1.8 billion.

Spirit Airlines Airbus A319 - Courtesy Spirit Airlines

On Wednesday (February 10, 2021), Spirit Airlines reported their fourth quarter and full year 2020 financial results. The carrier reported a fourth quarter net loss of $157 million or ($1.61) per diluted share and a 49 percent revenue decline versus Q4 2019 to $498 million. For the full year 2020, Spirit reported a net loss of $429 million or ($5.06) per diluted share on a 53 percent year-over-year revenue decline to $1.8 billion. Fourth quarter load factor declined 25.4 percent to 71.5 percent compared to the same period last year and total passenger revenue per segment was 14.5 percent lower at $96.64.

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

“Soft demand driven by pandemic-related concerns continues to have a significant impact on our operating results. However, our leading low-cost structure remains a key advantage and positions us well to compete in this environment and beyond. Our load factor and Adjusted EBITDA margin for the fourth quarter 2020 are among the best in the industry, illustrating the strength of our business model. While the road to recovery is anticipated to be choppy, we are confident we will be among the first U.S. carriers to return to profitability.”

Spirit reported that fourth quarter operating expenses declined 22.1 percent to $658.4 million largely attributable to a year-over-year decline in both volume and fuel costs. The company took delivery of two Airbus A320neos during the quarter, one of which was financed with a sale-leaseback transaction and the airline ended the year with a fleet of 157 aircraft. Also commenting on the company’s financial results, Spirit’s Chief Financial Officer, Scott Haralson, added,

“Our fourth quarter Adjusted EBITDA margin of negative 17.8 percent was in line with our revised guidance, with revenue coming in as expected and non-fuel costs coming in slightly better. In the first quarter 2021, we are facing new travel restrictions and state quarantine requirements which have temporarily stalled the demand recovery. In addition, we are seeing a recent rise in fuel prices compared to the fourth quarter 2020. As such, we estimate our first quarter 2021 Adjusted EBITDA margin will be between negative 45 to negative 55 percent, assuming a fuel price per gallon of $1.75. While these short-term developments are frustrating, sentiment is improving and we are well-positioned to succeed as demand recovers.”

As of December 31, 2020, Spirit Airlines had unrestricted cash, cash equivalents and short-term investments totaling $1.9 billion. The carrier’s fourth quarter daily cash burn averaged $1.8 million, while total 2020 CAPEX was approximately $537 million (around $194 million net of financings). During 2020, the carrier implemented numerous measures to preserve cash and enhance liquidity. The company reduced planned discretionary non-aircraft capital spend by over $70 million, reduced planned non-fuel operating costs by $30 million and entered a two-year senior secured revolving credit facility for $180 million, which was fully drawn at year’s end.

Spirit also completed a public offering of $175 million aggregate principal (net proceeds $168.3 million) of 4.75 percent convertible noted due 2025, as well as a primary public offering of 20.1 million shares of voting common stock, netting proceeds of an additional $192.4 million. Additionally, the company completed a private offering of $850 million in 8.0 percent senior secured notes due 2025 (net $823.9 million), and completed the sale of 9,000,000 million shares of common stock pursuant to the at-the-market (ATM) program entered into July 22, 2020, netting proceeds of $157.7 million. During 2020, the company also received a total of $344.4 million in PSP funds under the U.S. Cares Act.

Miramar, Florida-based low-cost carrier Spirit Airlines is committed to offering the best value in the sky with service to destinations in the US, 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 US. The carrier proudly calls their youthful fleet of aircraft their “Fit Fleet®.”

In trading Thursday morning, shares in Spirit Airlines, Inc. (NYSE: SAVE) were 5.84 percent lower at $30.77/share (9:32 AM EST).

Source: Spirit Airlines


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