Spirit Airlines reveals IPO details; still has just 1% of US domestic market despite launching 14 new routes this year
Spirit Airlines, the self-proclaimed Ultra Low Cost Carrier (ULCC) based in Florida, recently confirmed plans for an IPO. Information submitted by the airline last September to the US Securities and Exchange Commission shows how the airline has evolved during the last five years. Between 2005 and 2009:
- Passenger numbers increased from 4.7 million to 6.3 million, though they peaked at almost seven million in 2007 and 2008.
- The number of airports served rose from 19 in 2005 to 43 in 2009.
- Aircraft utilisation was improved from 8.9 to 13 hours per day.
- Average sector length each year hovered between 881 miles and 956 miles with no real underlying trend.
- Average annual load factor was consistently between 79% and 81%.
- The number of aircraft in the fleet actually decreased from 33 to 28.
Results shown for the first half of 2010 showed passenger numbers were growing once more and that the fleet had grown to 31 aircraft. Since then Airbus has delivered additional new A320s to the carrier in September 2010 and January 2011, and two in February 2011, bringing the fleet size to 35 aircraft. Despite this according to OAG data for May 2011 the airline has just a 0.95% share of US domestic seat capacity ranking it 12th, between Hawaiian Airlines (1.12%) and Virgin America (0.68%). In terms of flights it has just 0.6% of the US domestic market.
Fort Lauderdale is biggest base with many international flights
Fort Lauderdale in Florida is the airline’s biggest base of operations with flights to over 40 destinations, including 23 outside of the US. Nearly all of the airline’s other US airports are served with just domestic flights.
International destinations currently served from Fort Lauderdale are:
- Caribbean: Aquadilla (Puerto Rico), Aruba, Kingston (Jamaica), Montego Bay (Jamaica), Nassau (Bahamas), Port Au Prince (Haiti), Punta Cana (Dominican Republic), San Salvador (Bahamas), San Jose (Costa Rica), San Juan (Puerto Rico), Santiago (Dominican Republic), Santo Domingo (Dominican Republic), St Maarten (Dutch Antilles), St Thomas (Virgin Islands)
- Central and South America: Armenia (Colombia), Bogota (Colombia), Cancun (Mexico), Cartagena (Colombia), Guatemala City (Guatemala), Managua (Nicaragua), Medellin (Colombia), Panama City (Panama), San Pedro Sulas (Honduras).
In addition, Lima (Peru) is served from Fort Myers, while Toluca (near Mexico City) and San Salvador (El Salvador) will be served from Fort Lauderdale starting in June.
Over a dozen new domestic routes already launched in 2011
Since the start of the year, Spirit Airlines has added over a dozen new domestic routes.
- Fort Lauderdale to Charleston (3 March), Dallas / Ft Worth (5 May), Latrobe (12 February), Niagara Falls (27 January), Plattsburgh (14 January).
- Myrtle Beach to Charleston, Latrobe, Niagara Falls, Plattsburgh, Washington Reagan (all 5/6 May).
- Chicago O’Hare to Atlantic City (4 March) and Los Angeles (1 April).
- Las Vegas to Dallas / Ft Worth (5 May) and Los Angeles (5 May).
The SEC submission also gave an insight into where the airline sees future network growth opportunities.
Profitably Expand Our Network in Attractive Caribbean, Latin American and U.S. Domestic Markets. We anticipate further penetrating attractive international and domestic markets currently underserved by low-cost carriers by increasing frequency and aircraft capacity on our existing routes, as well as by starting new routes to cities we do not yet serve. We believe we can accomplish this by:
- using our proven market selection process, broad knowledge of local Caribbean and Latin American markets, and expertise in local regulatory and business practices to optimize our route structure and schedule;
- pursuing attractive new route opportunities in markets that limit air carrier competition through frequency or carrier designation restrictions; and
- selectively expanding our presence in large U.S. markets that feed traffic to and through our South Florida base as well as in underserved U.S. cities where we can develop or maintain a strong, profitable share of the local market.
Source: Spirit Airlines SEC filing (17 September 2010)