It always fares poorly in customer satisfaction surveys. When "I hate Spirit Airlines" is Googled with no quotes, there are 821,000 entries returned in 0.30 of a second. There is even a "Boycott Spirit Airlines" Facebook page for the haters (with over 36,000 "likes" -- how ironic). But if anyone should love Spirit Airlines as an investment, it is Warren Buffett.
There are many reasons why "The Oracle of Omaha" should be showing Spirit Airlines the love. Spirit has all the attributes that Buffett finds appealing for an investment.
Warren Buffett favors the best-performing company in a sector, which has great management. Spirit Airlines has a profit margin is 9.80%, compared to the industry average of 0.03%. Southwest Airlines (LUV), considered to be well managed, has a profit margin of 3.60%. US Airways Group (LCC), which Buffett did invest in and lost heavily, has a profit margin of 4.10%. The world's largest carrier, United Continental (UAL), is losing money with a negative 0.50% profit margin.
Not having any debt should help Spirit Airlines maintain that superior profit margin.
The industry average is a debt-to-equity ratio of 3.41 with United Continental at 6.98, U.S. Airways having one of 3.93 and 0.45 for Southwest Airlines.
Buffett avoids debt, once noting in a shareholders letter that, "Good business or investment decisions will eventually produce quite satisfactory economic results, with no aid from leverage. It seems to us both foolish and improper to risk what is important (including, necessarily, the welfare of innocent bystanders such as policyholders and employees) for some extra returns that are relatively unimportant."