Originally Posted by
DrSteveBrule
I believe Spirit revised last quarter and does not expect a return to profitability until second half 2023, but that would only occur if they can get control of attrition, which it has not.
From TC Q2 conference call:
"As we've discussed before, we are still operating at suboptimal productivity levels with total fleet utilization around 2 hours per airplane less than our 2019 levels. We've built an efficiency-based franchise that maximizes earnings with optimized utilization of assets and labor. The carrying cost of underutilized assets, human capital and lack of capacity production are delaying our return to run rate profitability levels. However, once we reach a more traditional utilization level, we're confident in our ability to deliver normal operating margins. The expected time line to achieve that goal will, in part, depend on the infrastructure that supports the aviation industry, most notably the ability to fully deploy our schedule to and from Florida."
"Network growth achievements were capped with fantastic news of the DOT's decision to grant Spirit all 16 available takeoff and landing allocations at Newark Airport, which when fully utilized, gives us up to 45 departures from the New York Metropolitan area. Two, return to peak utilization and profitability. For utilization, our expectation was to deliver this by year-end 2022. But after experiencing how the ATC has operated this summer, coupled with our new crew planning strategies, it seems more prudent to target the summer of 2023. Full restoration of profit margins will, as we indicated, return once this target is achieved."
In other words, Spirit (and JetBlue) need better optimization to make a profit. Optimization that comes from harder working crews. Starting earlier in the day, faster turns, working with more MELs, and flying into the wee hours of the night when most Legacy pilots are sound asleep.
That business plan isn’t great for pilot retention. So you better show me the money!