Spirit Airlines(US:SAVE)2022-10-27 17:15Financial Data and Key Metrics Changes - The company achieved a breakeven adjusted pretax margin and reported adjusted net income of $3.6 million, or $0.03 per share [11][27] - Total revenue reached $1.34 billion, up 35.4% compared to Q3 2019, with total RASM at $0.1107, an increase of 19.3% versus 2019 [18][11] - Non-fuel operating costs were better than expected, while fuel cost per gallon was $3.82, about $0.15 higher than initially expected, leading to an additional $27 million in fuel expenses [27][28] Business Line Data and Key Metrics Changes - Passenger revenue per segment increased by 23% to $67.52, while non-ticket revenue per segment rose by 21% to $67.07 [20] - The load factor was strong throughout the quarter, although September's load factor was 2.2 points below that of September 2019 [19] Market Data and Key Metrics Changes - The company faced infrastructure constraints, particularly in Florida, which limited flight volume and network optimization [14] - Despite these constraints, demand for leisure travel remained strong, with no signs of slowing down [19] Company Strategy and Development Direction - The merger agreement with JetBlue was approved by stockholders, aiming to create a compelling low-fare challenger to dominant U.S. carriers [8][9] - The company plans to target 60 billion to 62 billion available seat miles for 2023, representing a 23% to 27% increase compared to 2022 [24] - The focus is on enhancing network reliability and gradually improving fleet utilization, with a target to achieve normalized utilization by mid-2023 [37][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by Hurricane Ian and Florida capacity constraints but expressed confidence in strong demand trends heading into Q4 [10][16] - The company is optimistic about the merger with JetBlue, viewing it as a positive for employee morale and future growth opportunities [61] Other Important Information - The company added three destinations to its network and opened two new crew bases, carrying a record of almost 10 million passengers during the quarter [26] - Liquidity at the end of Q3 was $1.3 billion, including $240 million of available capacity under the revolving credit facility [29] Q&A Session Summary Question: Update on runway timings awarded by DOT - The company has deployed the use of peak times in Newark and is utilizing the awarded timings to make flying permanent [45][47] Question: Attrition and hiring trends since the merger announcement - Management noted elevated attrition rates but emphasized efforts to reassure employees about their roles in the larger merged entity [62][60] Question: Insights on peak versus non-peak travel and seasonality - Management observed shifts in travel patterns, with off-peak days seeing increased demand, attributed to hybrid work trends [72][74] Question: CASM expectations for 2023 - The company anticipates some pressure on CASM due to reduced capacity but expects overall CASM to decrease year-over-year as utilization improves [78][99] Question: Strategy on ancillary and base fares - The company aims for a balanced approach to maximize total RASM, avoiding over-reliance on either ancillary or base fares [82][83] Question: Growth opportunities in other markets - Management reported a bounce back in international traffic and continued growth in markets like Los Angeles and Las Vegas [121]