Spirit Airlines reported third quarter 2015 financial results. For the third quarter 2015, Spirit's total operating revenue was $574.8 million, an increase of 10.6 percent compared to the third quarter 2014.
Article continues below
That was driven by an increase in flight volume, partially offset by a decrease in operating yields.
Total revenue per passenger flight segment ("PFS") for the third quarter 2015 decreased 13.1 percent year over year to $120.35, primarily driven by a 20.8 percent decrease in ticket revenue per PFS. The decline in ticket revenue per PFS was driven by lower fare levels as a result of increased competitive pressures as well as a higher percentage of Spirit's markets being under development compared to the same period last year.
Non-ticket revenue remained stable, declining only 1.2 percent year over year on a per flight segment basis to $53.39. The decrease in non-ticket revenue was primarily attributable to the outsourcing of the Spirit's onboard catering to a third-party provider under a revenue share agreement as well as slightly lower bag revenue per flight segment.
These declines were partially offset by higher per segment convenience charges compared to the same period last year.
Adjusted operating expenses for the third quarter 2015 increased 2.0 percent to $417.3 million3. GAAP total operating expenses decreased 0.5 percent year over year to $417.6 million. Operating expenses benefited from fuel expense decreasing 32.5 percent, or $55.7 million, on a fuel volume increase of 30.9 percent.
Spirit reported third quarter 2015 cost per available seat mile (ASM) excluding special items and fuel (Adjusted CASM ex-fuel)3 of 5.39 cents, a decrease of 9.0 percent compared to the same period last year, driven primarily by lower aircraft rent per ASM and lower labor expense per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft.
Labor expense per ASM in the third quarter 2015 was lower compared to the same period last year primarily due to scale benefits from overall growth and from larger gauge aircraft. ■
Under an intense surge of arctic air, Friday morning will begin with the coldest temperatures so far this season across much of the central and eastern U.S. with blustery conditions and a piercing wind chill.