US budget carrier Spirit Airlines posted fourth quarter 2022 (Q4 2022) revenue of almost $1.4bn, taking it to $5.06bn revenue for the year, a 56% increase on 2021.
The Q4 2022 figure was "primarily due to increased flight volume and stronger operating yields", Florida-based Spirit said, and was up 43.5% on Q4 2019.
Spirit shares climbed by 7% after the results, which were above what the carrier had expected, were announced late on February 6.
"Leisure demand has remained strong and our team is doing a great job maximising revenue production. In the fourth quarter 2022, despite a significant number of weather-related flight cancellations during the peak holiday period, our team delivered better-than-expected unit revenue
performance," said Ted Christie, president and chief executive.
Operating expenses for the year 2022 came to around $5.6bn, over $1.9bn of which was on jet fuel, more than double the amount spent the year before. Salary costs increased from $1.06bn in 2021 to $1.25bn in 2022, in part as the company expanded its headcount by over 2,000.
The carrier reported a net loss for Q4 2022 of $270.7 million, or $2.49 per diluted share. Excluding special items, adjusted net income for the fourth quarter 2022 was $12.6 million, or an adjusted net income of $0.12 per diluted share. The pre-tax loss came to $340.3 million and a pre-tax margin of negative 24.5%. Adjusted pre-tax income for the fourth quarter was $23.million and adjusted pre-tax margin was 1.7%.
The final quarter of the year saw total revenue per available seat mile (TRASM) at 10.81 cents, up 17% compared to Q4 2019 on 22.7% more capacity. On a per passenger flight segment basis, compared to the same period in 2019, total revenue per passenger flight segment in Q4 2022 increased 22.5% to $135.62. Compared to Q4 2019, fare revenue per segment increased 22.1% to $64.31 and non-ticket revenue per segment increased 22.9% to $71.313. For the fourth quarter 2022, the higher fares were on a load factor of 81%, with DOT on-time performance at 73.2% and completion factor 97%.
Spirit closed Q4 2022 with unrestricted cash and cash equivalents, short-term investment securities and liquidity available under the company's revolving credit facility of $1.8 billion. During the three months, it completed a private offering of an additional $600 million 8% senior secured notes due 2025 by Spirit IP Cayman and Spirit Loyalty Cayman, indirect wholly-owned subsidiaries of the company.
As of December 31, 2022, the issuers had $1.1bn senior secured notes outstanding. Spirit increased the commitment under its senior secured revolving credit facility by $60 million to $300 million during Q4 2022, with the amount remaining "undrawn and available" at year-end.
Total capital expenditures, including net pre-delivery purchase deposits for the 12 months, were $246.1 million, primarily related to the purchase of spare parts, including four spare engines, two flight simulators, and expenditures related to the building of Spirit's new headquarters campus in Dania Beach, Florida.
Among the operational highlights of the year was the carrier's pursuit of a merger with JetBlue, which stockholders endorsed in October but which remains subject to regulatory approval and could be challenged by the US government.
Spirit hopes to conclude the merger in 2024, however, and in the meantime has gone about adding destinations to its route network. In 2022 these included Albuquerque, Boise, Memphis, Reno, Rochester, Salt Lake City and San Antonio in the US as well as Monterrey in Mexico and Ponce in Puerto Rico.
Spirit hired over 2,200 staff in 2022, taking its workforce to over 12,400, and launched partnerships with ATP Flight School, CAE and L3Harris to "expand its pipeline of highly skilled, professional pilots". It in turn opened pilot and flight attendant crew bases in Atlanta, Georgia; Miami, Florida and Houston.
The carrier opened an aircraft maintenance facility at George Bush Intercontinental Airport to help maintain and service its growing fleet, which included the delivery of 10 A320neo in Q4 2022, taking it to 194 aircraft, up a third on Q4 2019. In January 2023, it announced the sale of 29 A310ceo aircraft to Gryphon.
“Despite some unexpected setbacks with Geared Turbo Fan engine availability issues, a continued stressed industry infrastructure, and other issues, we have been steadily building back to full fleet utilisation and are on track to be close to full fleet utilisation by the end of 2023. These issues, together with Airbus aircraft delivery delays, have led us to be more conservative with our capacity planning assumptions for 2023," said Scott Haralson, chief financial officer.