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
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