Spirit Zigs as Other Airlines Zag
Senior Vice President Barry Biffle said other carriers won't retaliate because Spirit doesn't seek out the business passengers they covet. "JetBlue (JBLU) and Virgin are chasing American (AMR)and Delta (DAL) business customers," he said. "We're not chasing the business customer [so] we're not a threat. In Los Angeles-Chicago, there are a lot more grandmothers going to see their kids."
A recent move by American to add winter capacity in Fort Lauderdale spooked investors, but Biffle said American adds Fort Lauderdale capacity every year. Los Angeles-Fort Lauderdale, one of three new American routes, already has three low-fare carriers, he noted.
Spirit also looks at its passengers differently. Other carriers like to retain them. Spirit likes to retain them too, but doesn't have the same expectations. "We appeal to a lot of customers who fly once or twice a year," Biffle said. "We won't have the repeat customers you will see at a legacy carrier."In early afternoon trading, Spirit shares were up 61 cents to $13.25. The 5% gain was leading the airline sector. Spirit went public on May 26 at $12 a share. On its first day of trading, it closed at 11.55. In the second quarter, Spirit earned $26.8 million or 37 cents a share, excluding items. In the same quarter a year earlier, as a private company, Spirit lost $10.1 million, a loss of 38 cents a share. Revenue rose 56% to $276 million; In June 2010, revenue was diminished by a pilot strike. RASM rose 22% to 11.37 cents. Traffic rose 37% on a capacity increase of 27%, resulting in an 86% load factor. Cost per available seat mile was 5.41 cents, lowest in the airline industry. -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV