Yes indeed.
We are leaving the market and shrinking and the low cost guys are moving right in.
Wall Street Journal
FEBRUARY 16, 2012, 3:11 P.M. ET
UPDATE: Spirit Airlines Sees Capacity Up 23% In 2012 Vs 2011
- --Florida-based carrier's expansion provides a particular challenge to AMR Corp
--Spirit plans to add seven planes this year, boosting its fleet to 44
--Notched up its fifth-straight year of profitability
(Updates with executive comment beginning the third paragraph. Updates share price.)
By Doug Cameron
Of DOW JONES NEWSWIRES
Spirit Airlines Inc. (SAVE) announced plans Thursday to accelerate its expansion, boosting capacity by 23% this year in a move that highlights the opportunities for U.S. low-cost carriers as larger network rivals shrink domestic flying.
The Florida-based carrier's expansion in cities such as Dallas, Chicago and Denver, and into the Caribbean and central America, provides a particular challenge to AMR Corp. (AAMRQ) as 60% of its network overlaps with the third-largest U.S. carrier by traffic.
With the three largest U.S. carriers--United Continental Holdings Inc. (UAL), Delta Air Lines Inc. (DAL) and AMR--all pledging to keep capacity flat or lower this year, smaller airlines are filling some of the gap.
Spirit grew capacity by around 15% last year, and the 23% expansion eyed for 2012 lags only the 30% growth targeted by Virgin America.
Ben Baldanza, Spirit's chief executive and a former American Airlines' executive, said on a post-earnings' call that he sees opportunities to expand profitably beyond those captured by its existing fleet plan.
Spirit plans to add seven planes this year, boosting its fleet to 44, and has around 100 Airbus aircraft on order for delivery between now and 2021.
Baldanza outlined the capacity plans alongside a sharp rise in fourth-quarter earnings, notching up its fifth-straight year of profitability and an operating margin of 25.7% that leads the industry.
Net profit in the quarter rose to $24 million from $9.5 million a year earlier, with revenue up 26.7% at $273.9 million, driven by higher ticket prices and its focus on charging for extras such as bags. The result beat analysts' expectations.
The stock recently was up 0.3% at $19.29.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
[email protected]