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Kevin Curran [00:00:00]

We're here with today's bell ringers Spirit Airlines and their CEO Ted Christie. Ted, one thing I wanted to ask you about was as a millennial I know a lot of people that fly Spirit Airlines and I was hoping for you to expand upon how you're targeting younger travelers in particular that are looking for a lower cost airline?

Ted Christie [00:00:15]

Well what we offer is a very low fare and that's for the most discretionary traveler and for people on a tight budget who don't have an opportunity to travel as much. This is the perfect airline because it allows you to customize your travel experience that might be you may need a check bag you may not. And on our airline you only pay for what you use. And that gives you good value.

Kevin Curran [00:00:35]

Well I actually wanted to follow up on that as well because there is a little bit of revenue deceleration in the first quarter guidance but there's a lot of talk about garnering revenue from ancillary sources outside of just the seats and I was hoping you could touch on that a little bit.

Ted Christie [00:00:47]

Yeah. You know we had very very strong unit revenue performance in the fourth quarter and we're very excited about what we're going to see in the first quarter as well. Ancillary is a big component of our model for the reasons I just stated which is it's a good value driver for the people who are buying tickets on our airline. They get to pick the things that are important to them and what we think we can do is price and structure that ancillary model in a way that best aligns with the demand and that's what really drives value to the people that drives value to our shareholders and that's the right way for us to approach the market.

Kevin Curran [00:01:18]

Well you definitely drove value to the show is over the back half of last year we saw charts of United, Delta, American Airlines kind of fall into the back half of the year but no pun intended, Spirit was saving some portfolios towards the back half of the year. What made your airline different from those major names?

Ted Christie [00:01:35]

Well I think we had a really cohesive rebound in the whole airline. We had top tier operating performance we were a number one on time airline in October, a top four on time airline and the entire year. Our bag performance is number one we believe in the industry. Our guest satisfaction metrics are going through the roof and that's coupled with very good financial performance, very good cost performance, high ancillary production as we talked about earlier. And so I think our shareholders began to recognize we've got a booming story here really head in the right direction.

Kevin Curran [00:02:07]

The last thing I want to ask you about because this has been in the news from the beginning of the year and then also might be coming back in just a few weeks as the government shutdown and that affected a lot of airlines. Delta saying could cost some 25 million dollars a month. Is that affecting you at all?

Ted Christie [00:02:20]

Well we see it more operationally. So as we try to add aircraft as we try to add destinations to our markets we need the government to participate in that. And so it can be disruptive when we're trying to do those things and we're a growth carrier. We're constantly adding new destinations and new aircraft. So that's probably where we see it the most it's not we're not a traditional carrier for the government. So we're not going to see it as much in demand.

Kevin Curran [00:02:44]

Definitely but it certainly was a saver of many portfolios through the end of last year. So we'll be certainly looking at the ticker which is under save this year and 2019. Thank you very much Ted appreciate it.

Spirit Airlines (SAVE - Get Report) , the leading low-cost airline carrier in America, is setting its sights on continuing to raise the price of its shares in 2019.

CEO Ted Christie recently joined TheStreet's Kevin Curran on the floor of the NYSE to outline the company's plans for the year upcoming.

"What we offer is a very low fare and that is for the most discretionary traveler," Christie said. "On our airline, you only pay for what you use and that gives you good value."

The focus on cost-conscious modeling is particularly relevant to younger travelers. As the millennial generation should shortly overtake baby boomers in the U.S. population, the longer term thesis for focusing on the younger generation is a salient one.

The focus on "get what you pay for" was consistently touched upon by Christie, as he said this should be leveraged to continue growth despite some slowdown from the fourth quarter.

Related: Boeing Shows Bigger Planes Aren't Always Better

The company forecast first quarter unit revenue to see some deceleration from 11% in the fourth quarter, to 5% expected for the March quarter. That metric deceleration was a cause for concern and led to a brief stock slide post-earnings. Still, Christie remained unfazed.

"We had very, very strong unit revenue in the fourth quarter," he noted, as the season does include a large degree of holiday travel. "Ancillary is a big component of our model...what we think we can do is price and structure that ancillary model in a way that best aligns with demand. That's what drives value to the people and our shareholders."

Related: Spirit Airlines Upgraded to Buy at Goldman Sachs

Christie added that the shareholders are beginning to see the growth story that this model provides and has allowed it to outpace peers in recent months. For example, as Delta Air Lines (DAL - Get Report) stock tumbled by double digits amid some turbulent markets, Spirit soared

To be sure, Christie explained that the company is not immune to the government shutdown fears that have curbed outlooks for many airlines despite its insulation from the travel of government contractors that tend to travel on business class carriers.

"We see it operationally." He said. "As we try to add aircraft, as we add destinations to our markets, we need the government to participate in that. It can be disruptive."

Related. Southwest Airlines Is Spreading Its Wings in Hawaii

For the full interview and Christie's outlook for low cost carriers like Spirit in 2019, check out the video with today's bell ringer above.

For more on how discounters and demand driving airlines stack up against traditional, dividend-driven airline stocks, head over to Real Money for Curran's thoughts.