Softpayman

The downward trend in SAVE stock probably has more to do with a negatively trending outlook (still overall positive). Lower RASMs.

From the Q2 '15 Earnings

For the second quarter 2015, Spirit’s total operating revenue was $553.4 million, an increase of 10.8 percent compared to the second quarter 2014, driven by an increase in flight volume, partially offset by a decrease in operating yields.

Total revenue per passenger flight segment (“PFS”) for the second quarter 2015 decreased 12.4 percent year over year to $122.59, primarily driven by a 19.4 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pressures as well as a higher percentage of the Company’s markets being under development compared to the same period last year. Although slightly lower year over year on a per PFS basis, non-ticket revenue continues to provide a stable revenue stream that is increasingly important during periods of lower passenger yields. Non-ticket revenue per PFS only declined 1.7 percent year over year to $54.24. The decrease in non-ticket revenue per PFS was primarily attributable to lower bag revenue per PFS and the outsourcing of the Company’s onboard catering to a third-party provider under a revenue share agreement.

Total revenue per available seat mile (“RASM”) for the second quarter 2015 decreased 14.8 percent compared to the second quarter 2014 on a capacity increase of 30.1 percent. The RASM decrease was driven by lower fare levels as a result of increased competitive pressures as well as the ramp up growth in the Company’s new and mature markets.

JoeyMeatballs

Here is article about RASM and low Oil. ( maybe Baldanza is smarter than every other airline CEO, lol)

https://www.google.com/url?rct=j&sa=...Fd8U-4cyUxv5yw


AAL ALGT DAL
Imperial Capital analyst Bob McAdoo released a report this week explaining what he sees as flawed logic used by the market in valuing airline stocks. While many airline investors focus on the industry-specific revenue per available seat mile (RASM) metric, McAdoo believes that the best indication of the performance of the airliners is good old-fashioned profits.


The Rise Of RASM

Back when oil prices were around $100/bbl, the airlines focused on cutting capacity and improving RASM in order to improve operational efficiency, maintain adequate margins and generate profits. Analysts and investors became focused on RASM, rather than profits, as an indicator of the strength of the airlines.

Cutting Capacity

McAdoo explains that the best way to improve RASM is to cut back on capacity by eliminating certain flight destinations, cutting the number of weekly departures or a combination of the two. He explains that, for airlines, cutting capacity is analogous to retail chains closing their weakest stores.


A New World

McAdoo’s argues that capacity cuts made sense when oil prices were so high that many flights had very modest or even negative margins.

“However, with $50 per barrel oil driving several hundred basis points of margin improvement across all airlines, it is likely that virtually all the formerly negative margin flights are now profitable,” he explained.

McAdoo believes that reducing capacity by cutting profitable flights simply to boost RASM numbers is not a logical way to run a business and that the primary focus should always be the companies' bottom lines.

Stock Picks

Despite his criticism, McAdoo remains bullish on airline stocks in the current environment. Imperial’s top airline stock picks are Southwest Airlines Co (NYSE: LUV), American Airlines Group (NASDAQ: AAL), Allegiant Travel Co (NASDAQ: ALGT), Spirit Airlines Incorporated (NASDAQ: SAVE) and Delta Air Lines, Inc. (NYSE

Jamers

Yep, $46 million is a rounding error over 5 years worth of revenue. Oh well, money in their pockets everyday starting August 1st.

8JRMfortheyear

+1 about the MEC.

Plane Ramrod

The strike was for 17M over 5 years

Tranquility

And how many pilots were on property at that time?

dn_wisconsin

Around 400-450. That includes the furloughs.

If you're doing the math the gap is smaller this time around because of having more pilots. You can form your own opinion about whether that's better or worse.

Qotsaautopilot

No chance I'm interested in a five year deal unless it's absolutely industry leading.

Lobaeux

The downward trend in the stock has more to do with analysts fears in increased capacity due to growth. That increased capacity coupled with a decrease in ticket prices, when compared to other airlines tends to make analysts think Spirit will not make as much money in the future as they did in the past.

I take everything a stock analyst says with about the same amount of skepticism as I do politicians.

gonyon

I am suspicious that the ask wasn't that good but we'll see when/if they ever release those details