SAVE - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Fourth Quarter and Fiscal Year 2020 Conference Call. My name is James and I'll be your operator for today's call. All participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] And I now like to turn the call over to DeAnne Gabel. begin. may you DeAnne,

DeAnne Gabel

Ted Chief are us on and This joining team. to call senior and call of be Commercial A James call Presenting Matt XX quarter today Chief on members simultaneously Airlines Executive earnings replay archived will call call. is this on Klein, website of welcome you, for leadership Also are Spirit days. today's everyone fourth webcast. our Thank being and Financial Scott Officer. Officer; our other our Officer; Haralson, Christie, Spirit's our Chief the recorded

and there materially Following expectations, included subject our our current forward-looking are from uncertainties. and prepared differ session be could to remarks, statements statements the on are discussion based will are Today's not sell-side actual risks contains that are forward-looking results SEC. duty that for to measures. performance special Factors those earnings analysts. items. that, will is a to We periods our I which the company's be to exclude on question-and-answer we the cause on file in fourth call by of guarantee the reflected a future of for quarter to reconciliation our undertake the website adjusting today, available any with to forward-looking Please non-GAAP In results over no release, the all comparing statements. our XXXX update turn refer With Ted. reports

Ted Christie

us today. and joining DeAnne, everyone for Thanks, thanks to

sincerest have that and to first thanks met with built of success. in They of the results a our XXXX the grit positioned of and history, resiliency report the necessary we with quarter opportunities a for My challenges turn ensure winning their well members pull the attitude for pillars contributions is the to Spirit Together, for throughout company ahead. the difficult year. As together Spirit final to team. the humblest the team Spirit's we of most my thoughts the year and

have on Spirit Spirit Fortune's we list just as to the named not named taking ULCC be the made the notice and want list. others noticed Companies. this well. of Most have team improvements the to I being on to Admired was congratulate guests Our take to World's are the only XXXX opportunity

only We also recognition. and to airlines airlines of included, one validating earned only three a one U.S. are worldwide of very be and eight

has for As we that's But and impact began. And on faster changes our had XXXX the to up so the pivoted while operational strong protocols devastating true cleaning sanitization along we redefined closer which new how wellbeing differently with top abrupt the members to adopt be turned came quickly schedule much know, many delivering all and strength, problems. comes given exceeded did of out the met pandemic moved departure the proud choppiness and priority continues definitely than to Spirit. our as an adversity team before, measures guidelines I'm and very been industry, to certainly make than and needed to asset ever our of recovery. performance. how solutions We team to and From enhanced of especially and that been our with an rules. or how beginning, it We from our tactical CDC other the guests. and was and

us a carriers, was us earning XXXX, performance was and among a which preliminary the on-time first XX.X%, based place For ranking. our completion on reporting place factor our earned full-year ranking third results XX.X%,

more to very positioned uncertainties that. out, could still now has will remains over is driven declining, just by a rating. And about on, do our position all options. is we are proud members, thanks our the enhance talented to know to With star counts dedicated industry to solutions turn rollout structure and details to recovery. our our And leveraging During protect earned time play of and performance. how to quarterly we to case that very our advantage. app invest leading I Matt in well I I'll self-service key am maintained. the asset efforts launched team. underway, Spirit turn an to but that technology competitive one and are There leadership we team X.X new XXXX, that, the it to summarize And of furthered the ensure mobile recovery is guests also we on the that to the With we I'll many Scott and intend the our in thing entirely preparing commitment go a the low-cost by focus saying for experience discuss but of vaccine

Matt Klein

for and Thanks guests us unprecedented last of rethink all of care care Ted of move Ted. And events XX The months have pandemic. other I each all to challenged of a our taking thanking the for processes. excellent contributions re-engineer the joined and as our of team for our members their we taking number through in

operating October strong. quarter Unfortunately, momentum was this holiday. revenue declined was fourth XX.X% dampened by XXXX up to the our Thanksgiving quarter case for year-over-year. spike leading relatively results, total the to counts the Turning fourth in Demand in

X.X% per primarily in Flight decrease decreased days driven hit averaged factor strong $XX.XX. another load. holiday per fourth desire a by for glimpse Passenger air in travel. us for XX.X% Christmas full to but decreased pent-up Total travel of during welcome segment, However, Load demand XX.X% while travel of per the segment revenue period non-ticket passenger revenue the revenue only XX.X%, peak quarter the some year-over-year, the average the gave mid-XXs segment peak for

color, a the by pandemic driven couple of non-ticket small line in is fully effects added the reduction on some rate For items. of

illustrated the per they pay based total our value of Our customers they savvy strong choosing. non-ticket the as extras to and are revenue by evaluate decisions on price. segment, option And for purchase their

our in improvements made product, and guests our reliability of others level Our overall we've operational the and are service. recognizing

to performance trailing up scorecard, only fourth fact, seat edition U.S. of Journal's In and moved the operational by annual XXXX of middle the ranking is in Delta spot place Southwest airline airlines Alaska. which Street Wall the Spirit one

Additionally, loyalty we ago, launched FREE our just a SPIRIT program. redesigned weeks few

very and to increased enjoy believe are program We for in drive will which returns revenue about the turn guests will new the and shareholders. excited the enhancements benefits

Moving ahead to the first quarter outlook.

the In as addition were restrictions January, the increased we Coast see from counts, jurisdictional and trends impacted January and especially to the usual February seasonality by spiked. December change for regulatory to on West case negatively

the from visibility thus remains travel which represents our American total forward, territories. but will will went profound To is far. total the We network said and not testing required a testing to not included our break so flying. territories, spring limited. destinations, the Therefore, new across on clear, curve the compared requirements our strength normal, inbound XX, very also which and be affects impact network, from as booking to that, to testing Latin has requirements recent which currently from approximately Additionally, anticipate had XX% U.S. for to our based enter and January trends muted regulations. impact remains of is U.S. effect somewhat network on our international into be approximately Caribbean do of the the destinations of show testing XX% relative and flying impact X% Having compressed unusually U.S. negative sun

improved our half has data, stronger recent March, of early for rate encouraged by will which and of indicates the also survey are anticipate for latter in be These what supported trends sentiment early traction the are exit by we indicate dramatically. signs March. than therefore We March much trends our

compared In the bookings. fact, our survey we at data is began which the first are last March down to tracking data XX% XXXX spring. of quarter with And into about search shows be to data is XX% Capacity it's down of in estimated approximately seeing translating compared down level XXXX. the evidence highest down January translate to the we and quarter month later for sentiment this first same XX%, since February XXXX will XX% been our the

are January and do survey rapidly we disappointing transitory, vaccine based counts penetration. and believe February on trends results, anticipated declining clearly case While the

network levels end the will the second as the demand our how stabilize profile of that backdrop, our be as watching by be quarter, now and midyear. broadly then still our With and fit. that expect approaching the and adjust leisure is and XXXX capacity And we now But here keenly always, developments our back We that's Scott. see we expect we are we will by between to to more as capacity. plans

Scott Haralson

part delivering from guests. and are publications of to Thanks and say of experience running Street we is Matt. thank airline members. Spirit be a magazine, to great and the wanted recognition Fortune a The Wall The Journal, our are I'm honored our reflection host websites this Also of we team. great other to you and team the congratulations to

adjusted $XXX the loss $X.XX XXXX Now financial or million, of share. turning performance, was to fourth our loss a quarter of net per

the the XX.X% as flight XX% related compared fuel and increase negative fourth decreased XX% was driven Our in XX.X% decrease for fourth fourth our line the volume. aircraft to some in by Adjusted EBITDA capacity, XX.X% in Despite quarter the in for in to the early guidance well to volume change in was a of expenses expenses year-over-year decrease due revised decreases volume million. given quarter both year-over-year. operating as December. This rate expense quarter XXXX $XXX reduction margin with fuel

And X.X% and wages due year-over-year versus rate fees benefits salaries, primarily at to increased increased For airports. and XXXX. due in example, an landing to other modestly, various rents members crew increase increases

twice with to sheet, investments. prior balance is almost This $X.X it billion and as cash pandemic. ended cash unrestricted XXXX much as balance the short-term was On the we of

aircrafts operated fourth through was two of XXX During and in XXX debt we sale transaction. fleet in parking with long-term financed leaseback roughly a the the aircraft XXXX aircraft, the of during our AXXX for ended period. our quarter, of financed fleet. one We quarter, took only we delivery which most fourth the AXXXneo With other

bring however starting the service. are AXXX to program into back the We

invest to the is to run point we advantage enough we get can the this recovery. airline and to set and of where once will As for strong up prepare in the network utilization and the In We lower to Ted the mentioned, take time beyond. operation and so. XXXX, airline we money XXXX do period to success time speed demand the ready took get full some for

a be amount service, will the maintenance ready parking. One parked of expense get up the bringing initial into being catch in to in of after for fair service back aircraft long-term there them steps

ongoing associated also as have expenses have with longer-term voluntary additional leaves. who new hires, as from We training well training for crews will on been

We pandemic our throughout to aircraft working around. Airbus the move have with been positions

$XXX quarter. higher million. discussed able between total, been with year we and in to million to is the be then, expenditures XX. have and $XX than to into in were move of out the be and In XXXX. total was is the $XXX of expenses pre-delivery delivered are $XXX holes $X.XX approximately drive push first we positions $XX for XXXX or XXXX the we had As per some for our total million, Operating in prior deposits anticipated the estimated to gallon to price in million. for million. Since on deliveries able bringing calls, million move six our in some spin fourth other some XX% capital aircraft CapEx fill XXXX no XXXX we I to in to around pre-delivery XXXX be does to now $XXX estimated additional higher quarter now Fuel stream be $XXX estimated net delivery to are aircraft year, to net million Together period. it deposits This our

In throughout a have weaker views the our been XXXX fourth, the the to seasonally quarter worsening being the typically addition on first first quarter. quarter quarter progressively of than

our mandates, a Given fuel have restrictions, international costs, the curves of tightening jurisdictional smaller. shortened plus booking testing and increasing

historically. portion revenue than have We today a booked would of we smaller

for we negative performance. this, the account negative quarter our between range into to takes quarter margin Given will XX%. EBITDA first estimate XX% to-date our This

on of and March the and our March projection relatively any the production. as bookings that of half what is we quarter's half this not demand get assets, spring many evaluating But business. much be in will traditional back of strong. improve focused overly metrics. unit we to Our that are where will And would of the March, full that realized know until in sits. of utilization it we the We most our half the revenue back stay could be with first unit useful through agree EBITDA our today, metrics most stakeholders muted improvements as aren't

For liquidity focus now, on our margin. remains EBITDA and sufficient maintaining maximizing

again. know However, look as eventually the metrics into matter will future, we out we unit

closing, to But How levels. a a full sure a for we able to where of point, all that goal expect We unit the below COVID is Prior first, make opportunities the financing on having far our we pandemic our to to recognize believe we years and pre pandemic, [X.XX growth fly lowest run don't around Our change. being were next back ex-fuel couple thing few depend is have one capacity cost below six the sometime growth. costs guiding decisions will available over we of run able number and of capacity in the we In the people be that our structure really value industry, XXXX XXXX. won't CASM decisions. changes get we trending for the anticipate to around our cents]. we fleet, non-fuel cost of But our need to would around to At success. to mid XXX% be airline. our

In for Spirit. opportunity the fact, it might set available even increase

will beneficiary leisure will lowest resurgence it VFR cost the demand and be a in happens. when industry of to have the We continue and a

to strong improving as costs it Our I'll and low With demand back hand Ted. that, succeed to with brand, recovers. position will together us our

Ted Christie

many get road progress to filled year. our of decisions. been couldn't be I and The to difficult Scott. challenges prouder has and past new Thanks, actions today the over with

necessary, ways demand these still to We have not achievements publicly. to nice While recognized go have leisure fully before also rebounds. is

destinations visit more turn and our to DeAnne. serve ease. back enjoy counts we focus to as in as and widely the summer restrictions available, travel closer friends vaccine anticipate this is will mind recovery. the we to and many However, the we get toward be case the ready It months. with relatives is go guests We abate With that our

DeAnne Gabel

And follow-up. question now related ready we one to limit analysts. to one Ted. that questions you you, We James, the Thank to begin ask are take yourself with from

are ready We to begin.

Operator

question Mike first Linenberg. comes [Operator from Our Instructions]

Mike Linenberg

quarter. we Two going to ones be quick When this here. capacity the is composition of deployed about think where your

I think, to guess guess Puerto that? referring If more Matt, I America/Caribbean, you and but I Islands. Latin/Caribbean? quarter, that, five out said XX% give Is change? March XX% how us you that on did you're it call Thanks. domestic does was XX% points some for you can Rico Latin is, Virgin color

Matt Klein

Actually, the I Mike. Sure, the in there now. you are what we're numbers quarter gave doing

would more and be U.S. the Caribbean, than but So approximately X% XX% domestic. a of is be America our approximately International, Latin the would is flying X% and is that, in touch rest territories, XX%

Mike Linenberg

beyond was thanks you for answering does further traditional on, are cetera? up it based does maybe make And - just bit your inventory I'm done know window then the Thoughts not short Okay, you've term, to a clarifying. more how longer I days? sense, curious, about tickets XXX-day out, how looking questions. XXX-XXX like on now notwithstanding very opening of potentially that it think make for you sense, carriers more Thank et out booking period. curve, offer kind historically, several my

Matt Klein

do change, we anywhere that change. the out out booking terms us far way opportunities curve really the into impacting near networks out far of historically, the not now, hasn't schedule see the results. push future, that So in our pushed right And overall need to for

into summer about the about and the parts March are, future, back curve we're that, with to out schedule, the starting bookings in booking to XXX you we're and to does see talking said early vary. length just the we So starting thinking occur But our traction sometimes. as we'll we out out days comfortable of go of having XXX the are well. half some days, about of like there, out besides that in Usually, said general

compressed volume. booking of we curve for is majority clarified Just I wanted when - that make the mass the take too, that to for the sure

in we're above However, And cases, for starting summer. are levels see to actually we out year's to traction parts see starting the in are out the summer. early in that some of last volumes

just out I overall there. theme numbers, that the So looking it's now, along to the people right demand goes say, of to there, looking kind people that encouraging, still want there fly. and very people summer and stuff it's and out there we're there with but the getting would pent-up small are are is in fly

Operator

Brandon Next Oglenski. from question

Brandon Oglenski

guess to capacity and the that's maybe morning, driving taking metrics talk you to to have by have the that order exposure I a So my legacy a in driving think Good I or I some schedule? what's order question. you guys you want talk can book, everyone, want for you constraints investors, debate Ted, with to competitors the whether are constrained you when you and are future of exposure that thank as way of not to, can add you those fair the Airbus your some do? mean, here? any to book?

Ted Christie

Sure, capacity performance. we evaluate so - close in the Brandon, by close in based way on morning EBITDA good

system. the we have the now that's the moving help we're So close way And like the that right in. capacity to through refine us tools we feel

that the we heard As deliver to limit say overall of capacity anticipate at the XXXX let's ability really by our is our the opportunities levels, to year, we road and you Matt more back down or crew. medium summer the mentioned this look term being

next - into running be bit crew have been in airline, service. little that that with next year. the today. won't crew And airplanes to we're and storage we'll fleet train the in the over those we back mentioned, We'll of have delivered We long-term that as have bringing we means to Scott which get ready, full until even - deliver ourselves hire have middle

need well still under be we're total right pandemic going that, that we And good when before ordered it's in we to that said few anything, a the nice And to that heard we as Airbus. to we need airplanes be actually company with And pandemic be the them. necessary able position XXXX. round airplanes for right would address beyond around limiter next this addition shooting think our years. advantage the I silver to be now, hit, lining that to was to opportunities refine to find what once. to out Scott five us XXX in that's we to take that you schedule. And And and mentioned needs that So airplanes we it's position find of believe that the some a able lift to for delivery that in does if we find to doors in did to over seven have that open up a has, that the

So I about think medium term. longer those are we're short, thinking the ways and

Brandon Oglenski

that, ex, Appreciate in fuel the back back and and the that six that is I right? below on the guess that's XXXX on to to commentary getting really get based system, CASM and crew Scott, utilization ability

Scott Haralson

Yes, airline our We said, airlines other that have part think important We been age clear pretty the a didn't it, running of an is like you full Brandon. going changes I are We fleet workforce I've simple. structural already the have didn't was to know Spirit. before. that's airline that through,

sure is I to that be as I airline, unit to running fly we at important start getting truth efficient and costs. really about And pre-COVID mean going doing cost we're you that's it. of fly So what you airline that an airline. back with Look, to we where run told make full mean, be the going think capacity

going to it, and how the schedule we how our six far that's years, about network, get. our to as continue few we fleets, over drive really below we we as So, think next

be that's are decisions but those really So going work. the to math is made, still how to

Operator

Pfennigwerth. next Our from is Duane question

Duane Pfennigwerth

from function PSP progression fourth much the the How a first is cost quarter quarter the of to optics? of

Scott Haralson

Duane, this Scott. is

We PSP back think the and lot anticipate of bring starting between of, a didn't capacity to of the the the to half crews already order you when really impacts. were year. QX more move have the in really back So running about QX, in

to numbers. mean, the airline and drove So QX were A already in QX the move But forward. fuel. I half capacity more expenses. of change than PSP we component between that cost is didn't the moving the really the and of related the move lot

Duane Pfennigwerth

has how for regarding dynamic you're is a one the maybe backwards, tactical just how in us your then you to what Matt, and give going And perspective? helpful. to you an and evolving thought international with you're more for on for a forward, that's looking is sense road unprecedented or this year can the going process be that from Obviously been tactical the seeing for or be But involved? industry less for Okay, you're and like the bumps people demand, not? all patient message going planning with

Matt Klein

to Thanks, Duane. would answer a couple answers question, of sort questions. I your of the

trying as possible. to it keep as I'm concise So

into we been lot forward, definitely may we the the to from happen. We've as against we of understanding making have flying. isolating or so could and to a going sure isolate as reacting redesign we We risk to happening though our think and compressed, It best where the there booking involved about curve are lot make have take are a is our on do are think aircraft that is what can. changes. we're on what's flying when able be we've we done, flying that for perspective What issues account for of crews to able the schedules demand to been moving

from have and close and to results closer ability that a without we some flying we the if get make don't see like we perspective, So, the in. into network booking we that changes disrupting

costs of start think and see the that in really on on continue to So what fit. you flying and have different make to top you as that all by not some things. itself, that, save close you have of get do ability kinds once you in improved of Having we have flying then analyses tactical an tell I we changes I would close said we'll regard, to

weeks the from of not be some travel, So costs few really can't by a saved when we're out flying.

decision of up and and process to set further tactically think how is out that we part of then all So both network. the the strategically

Operator

Our next question from Hunter Keay.

Hunter Keay

sort need going have normally now from depreciation you the accelerated if on Did any you're get that management? building that on the not running the airplanes you're would if to tax on math impact business you're taking right of XX NOLs of focused sort cash shelter the

Scott Haralson

I Hunter, at a looking XX-year Yes really mean view. really we're it from doesn't, the assets

long-term assets, view longer-term not NOI view tax back cash profitability component the near-term the really of in And the of other around our returning near-term opportunity of the or thinking business. we're taking will so a The sort set, to happen about

Hunter Keay

Okay. Thanks, on couple of New Scott. York. And then JetBlue-American the questions tie-up in

any it? you expect revenues. been opposed get the guys the at and then slots JFK It's why to DCA it you a why can't is guys so JV, do pricing, First, deal, filings? vehemently at divested big not opposed pull to of you so in and and they can't on coordinate the are to What

Ted Christie

do Hi, you for we wish elaborate. the here question. further be could complaint on I Hunter. remiss I offering think with I in that. commentary any have an I'd the But open so Thanks It's referenced DOT Ted. as

Operator

from Our O'Brien. next question Catherine

Catherine O'Brien

had a made. the you've I So question on staffing of utilization some comments and

XXXX, to crew factor leave to around just in calculus is Do Thanks. or mid-XXXX, portion to be your back second inflation of by that half salary utilization in levels is getting is limiting XXXX going it of due was it more half benefit co-productivity think to you your seeing a current were it back XXXX? with having to second members of the going If the a is Why you XXXX? full skewed? and to crew capacity some my trying

Ted Christie

behind. start. I'll can jump Ted is This Scott in and

answer. the basically is lag is there So

in And use have people costs people fixed through simulators in over of requires the as course those us and get online some using it, that flexible well pandemic with workgroups training that our time. a we themselves. been downturn get resources navigate we can both in of and the plants, training proactive have trainers voluntarily fixed as discussed expense this bringing does our we've set in very as as have programs So back down those we in to but - with and to

of limiter the to have ends we that's its move as bit does being a a that hiring And snake I bit. that little way in airplanes being up a addition to that it more to to staff why speak. delivered so we'll through And are the have little think do additional the

want you to? do Scott, So

Scott Haralson

in airplanes are think number of I in bigger than we were of Yes, XX% the We're the big aircraft XXXX. this. today component

So still deliveries coming. are the

we So entire getting point fleet. what fleet, not our to XXXX about all is we're can where the of operate talking the

though So we the even measure keeps pause hiring. the moving

up got again. So we back now that a spool

got to probably of we got up catch a do about amounts we again what year's to we condensed hiring, a what for missed to period. So that worth over

that as a lag said, but just we in. coming have So aircraft kept happens it's the

Catherine O'Brien

you. going of the know I flying? I the us it? non-ticket it. clear. there's to Matt, about to think pieces forward? into in Got Thanks manage we how international a or planning one so through revenue fair that guess of demand And what funky anything should you that. on you're on non-ticket, I one, loads walk then given questions moving seems couple of your for Very load some appreciate seeing for guidance there like thing in for in going expected bit quarter? the Based first Is higher your revenue Sounds managing right peers a now? Can with work we just

Matt Klein

Sure.

So is, the on not some with funky not the That's the with profile issue much there on in then it's not on volume but sure so impact you a the say largely can Generally network international going I'm is to why non-ticket. there too yield that. with yield issue, volume profile. is understand is to going international network than there the it is side be speaking, on more

model. markets forward. that always we our within overall stimulate fare we And carrier. been have business the a will that, moving of support change changed we markets, our and and will And none cost low terms In of network, be to grow structure none that's of helps

ability that. as we first volume are we manage, do then are And and to and carrier. who we foremost to we and what you'll the be will, That's cost supports our see So structure we we going a do.

what's So going versus the just anything a dealing right bit imagine on my is think the as I transitory. opinion now right changing to don't be in industry you is its is supply And demand little whole really with now, imbalance. can going

we've the other think dip the the is since started, pandemic demand third had in counts that headlines going I this on time that in media. case are things with and a to relative

is it's the want impacted So we'll buying or we're this, plans those to in high, can on can before. there going but we're a another not to than people demand then tickets, varying way, they means come to is soon. out forward news detail a go. relatively customers that whatever want our being go is that COVID-XX a they is And we're they demand their And people to. And want will and normal fly, And even it or there What best one a circumstances. ways. you where positive variety of data. go be perfectly pandemic. moving lot where out soon a real there. then change see issues the it'll define give they shape, very to rate To stronger really be into talk able related actually sign we clear of have me, reason, to lot, And and this some are But alleviated. high want have And we'll of want cancellation is to soon when of lot about the for across in go be go pent-up form, like something lives that that's it's survey of to being compared relatively that for seeing by thing reasons, just we them fly for that somewhere, before, most their think to that to going personal I almost that that in still to year still high, a was

Operator

question from Becker. next Helane Our

Helane Becker

thank and for the time. everybody, Hi, you

a I in on think due So that? is going question, you flight it? contract the Are address you this attendant postponing How pretty to that easy are to FAs? talking are the comes you May,

Ted Christie

Ted. Good morning, Helane, It's

open here time how the of group, with been next relationship strong. we're would in is, mature months while. very the over communication sort describe we have pace. handle flight to next think start and that and or I step is of a regular leadership six when And - meaning clear at the and I And the that quite will our contract, we're so, a it negotiating to regular what be in thing the it's quick timing and the for attendant

So the ready will but a the but time fine the come. I know I it that be it. issues we'll front right actual be our partners, working wouldn't as FA Clearly, on And the it, come to and will all do date, of we're now, ready up distracted point has well. in put will airline through

Helane Becker

that convenience, about with respect is business doing trying just then you that? in follow-up How thinking that the the third-party And you want a to Miami I something just Is it for report you I'm there, into? you're about question but there, K, maintenance find that you're to to find they're do the GlobalX. anything get annual them? a can it. at couldn't are business for my this like Is night really last

you maybe it, about talk you can if page? point to So the

Ted Christie

that's it answer, if your think small. it's so bear didn't mention. That I

I assistance. engage latter which And think your offer it's is We later Whether your date. South issue, genesis business in little be in or not of - happen the I bit of it's think question, more a we to Florida. could that's a sizable for convenient. to the a we here

for in few well, reason of their under public as where GlobalX the as would We have bases, other certification periodically well companies that because radar. one part this The it needs to we've the helped past maintenance small stuff. be is about is had it otherwise, But and items very done talk process. a

Operator

Our from Didora. is Andrew next question

Andrew Didora

cash - you and of breakeven need for my backdrop been can in cause Thanks. be whatnot. back talked in if that year, remarks, factor model Are to where and the OpEx question one not, that gone pressures your this, your terms the this I I prepared can really you profitability? guess you there cost with And not to with of you have provide cash to guess there cash XXXX and flow of about back guideposts Scott. I has why? know breakeven about question I my where to being revenues for getting agree is, both guys you're do pretty, profitability fuel but XXXX and a get With any first guiding to is talking some lot close levels.

Scott Haralson

mean, down a fairly increase Andrew we're over from it's fuel sizable I forecasting even still XXXX, versus though a perspective, XXXX.

for we lower profitability fuel slightly for that, math XXXX. than that same it's the if And is the to before, about makes the about you then think hurdle if which returning and EBITDA So airline we've talked really around adjust margin.

EBITDA you where XXXX at discount would kind out. for be at cash breakeven capacity around to we've range perspective, from we're pulled margin, some unit XX% XX% number of the in revenue you the obviously, full assuming a puts So of expenses

gives about might So that proxy a the But critical to lower happen. profitability. to thinking full that. eventually getting bit EBITDA to for hurdle to breakeven little is how that Returning when a you than airline is a and we're

how load, big that's of So we'll maximize sort that's and in play out. capacity, we'll and we'll step, drive it's that TRASM the drive probably first order then going to

Andrew Didora

why first follow-up kind revenues curious capacity you're your 'XX. right recovery, of Thank cost a structure, with XX% directionally, know still down guide and there, margin taking with for this aren't why out XX% but still you just EBITDA on the just down airline based Just versus you're still now? the is XQ of the more quarter you. prepping revenue I forecasting And

Scott Haralson

of think we it, for And a benefit the deployment I tight not mean, there I of how there lot a we is Yes, model word have capacity. benefit. mentioned flying think are, incremental ultimately, earlier, TRASMs pretty given incremental about Ted but is in

production. about fares view sits EBITDA how on and a a we to where today, running close TRASM have and think optimal are, it, we So where sophisticated pretty we're pretty

So to that that would less, worse. if EBITDA were implies be fly we

- because amount about fly EBITDA tough, do right day, you're every capacity. mean, of single what So math, to understand is we can I think talk this the I thing maximize you it's over to the period biggest the it's look but here, in sitting we not

that's number focus. our one And so

Operator

from question next Our Jamie Baker.

Jamie Baker

as you experienced what have But Jamie Baker save going wondering experienced systems experienced well to haven't recovery time witnessed be likely pace think with revenue Because in and understand inputs a JPMorgan. is a the build, you're and I'm automated Similar of even past, can question to to demand to bookings of excess what I this with that modest management respond asked tell before? going to or trying what recovery. is scenario, JetBlue, some process, in be your irrelevant. that's in automated to pricing how the any me if just you I'm been response will

Matt Klein

thanks the question. Matt, is this Jamie, for

ability here we we've think, about to got little X.X since pandemic, years been about so think the we three four I've the environments data, a now, how we how processes, And the management about our but that, to network our well think we you we and non-ticket. gone kinds we've over So years, every been here, I and about as about our just also of it's been we year think different see through around, of think as demand revenue respond. not ticket, before move

how be they they're network respond recovery, understanding their we've systems in become and may So our a yield they going us, those the I in in think I we in with think not We by cases, our airlines, would time own to spend lot about demand we've experts of And yield little a a markets. thinking one markets of pricing competitive of management for that to your management, to you airlines. in how of saying our and some point-to-point how and have slow agree seen about to compete. lot years, competitors with bit lack how changes going we're how be reaction their about about question over think answer a

So we're that. to used

at demand number muscles we've for fact, there because been best to think we a of that In be already. when responding I recovers the have years the built already to this

for move quickly very demand this. or down And can we ready up that for on moves Jamie. how we're matter, based either So

Jamie Baker

what very you capacity, terms just a to $X.XX that. are might the don't outcome. What do that mean, your point, you're dipping of brainer just cost guaranteed the more getting just capacity, That's is buckets I'm or an a fly to no appreciate and to I but be? trying basis, that And annual below at do you almost helpful. in on just mathematically importantly, talking some really six. achieve if be to where the $X.XX reasons you if confidence? the below assess I produce clarify below it's follow-up, extent in not requisite - that think XXXX, it

Matt Klein

the get ones throughput Jamie, talking get the variables in six, talked we've capacity airports the we'll on reverses the mover in most efficient to that it of about. other downside airports. how after industry around think about to I rate some said, question, we're that a being some components late, point on full We've benefit us way the likely as that to in the know, to a And number hopefully, that as talked run may sub will you we're XXXX. get we'll I that, risks the that's of some significant gets like fair including have think the a far be more depends below inflationary about And on of side, to we mid-mark is that going Now, six likely variables. it's CASM

we will some to around are But that other make that be there some we fleet, is mitigate hopefully, of we're we labor going airline, do migrates We're around to the the there that. to all pressures dictate this. going schedule So the have things how of decisions going way. that face. But to obviously that the

So I think didn't during us, a the this it's structural for we of changes period. lot have

about to issues we've the same efficient and same had be just the airline. that So we how going that we the thoughtful have past it's issues run will be in have forward. We the

Operator

next Our from Caiado. question Joe

Joe Caiado

more it the and base trips, leisure vacation? requirement to versus too family to beach that's traffic a a tell? early just trips your VFR field that to sensitivity there different if three- and new for visit differences What between international VFR fare isn't question flow in to quick maybe are is the your about curious traffic field to cetera. or near the flying as near U.S. those four-day just duration opposed markets, I'm territories, business Or Matt, international Caribbean leisure? testing is of et

Matt Klein

to vaccinated, tests understand little hard leisure on than hard the But in it's just I as over it's That and could specific that little No, play reflects leisure has People results without to that the fly it's think getting you're but confidence away plays. that to and to And you highly can the everyone the definitely want these time. have change the a a and are change it's get to volume it's and really pure need have traffic. you get VFR to then on as the these are And the But can of more travel not from not showing. that tell see confidence details, a I frankly, we leisure not search overall yet. ones a our we're as now destinations. something little reliant understand. if industry, sidelines, destinations. because bit want quite it's to more are right a have a vacation And once situation definitely pure the people to fully They're Joe, grasped that destinations more of not well. the disparate impacted shift too really lot early we none an tell more been going they now lot into you traffic just leisure that and

Joe Caiado

start handicap right Quick Thanks you true the next you that you are at for would now, those And in time. this overall to administration plentiful Ted, week were involved if made liquidity. for point? white house? you think domestic Scott, hold the are funded still Does the how well probability with requiring clear And one, tests that travel? discussions COVID

Scott Haralson

good high look, pretty I specifically we where testing, mean, level not So we at thinking feel about a around are. liquidity

on not So the answer planning we're is anything additional. quick

those depression, that, how we're growth It's look I Those really we same capacity to the will revenue things with balance reach about it's that not think all demand would the forefront naive levels thinking the and planning around what our again, is be the unit great our things. profitability. profitability a and revenue idea that growth isn't around, things the we're at our of once outcome. longer production, going leverage sheet therefore and term, airlines, about thoughts unit drive be and drive rates,

beneficiary So world. a the and we're we're and our the in going we're be ready going But to to outcome view going today of airline be that, that adapt ready to profitability going flexible six for be and be the going to to our grow again, to flexible about, event. to us be had. protecting be thoughtful there's and we're to airline But year is

Ted Christie

have I relates And as while House. White testing and I the it - domestic to the direct I guess, personally not communications issue, have had with

the that of be addresses is organization think of logistically heard it on And the confirmation airlines has, do from member why and not airplanes difficult just the and it been our independent our would the in but I of of you've Secretary put that that peers, a represents me, for doesn't address lobby a transmission support it don't And in have extremely aware four Transportation, to communication issue. the all with and that the board they are and authorities We and ULCCs not protocols they we event. place that everyone issue. concerns. not the We that from know We don't believe travel I given That's are from have idea. expensive. a do think

been that that that point day. So carry has will made we're strongly hopeful and the

Operator

DeNardi. Joseph from is question next Our

Joseph DeNardi

at but factors during or about pre-COVID are demand you strong mid price think correctly. if fares? more this I point peak much promotional the you you strong I saw pricing about periods quarter you the periods same talked heard is during talk you with seeing in those that demand, fourth Matt, Can XX load like

Matt Klein

on it's let paying getting Having board the - answer on of of base board. been see we're less on and the to one board. of on me Joe, high the to on lower things And base strongest flights. on curve, On it average, strongest get booking a the with the so, the has has more going about average not that, even days it's of yields, question necessarily said do end to

had this and experiencing. we're make on does on that don't compressed revenue issues airplane. that hedge being the bit based think don't the and to seeing how but in booking I on I'm little us the of we put either, the a we've unique a think One environment I curve how

inexpensive network. is we traffic we a so will our that So the would are and that where good little base we on would then you I Joe? order in I to a need we bit flow how actually there, we hope peak more to periods. get to board that relative get makes But too understanding we through that do like are, selling the to sure make tell be. sense feeling confidence on

Joseph DeNardi

at versus Given about So XQ XQ? think going And the to by give get close supply EBITDA costs Yes, Can capacity January XQ assuming it and about talking for speed again. and does month those pre-COVID what CASM this to February we you're us did margin Thank how And impact you love and of How you. does you in of thank full quarter? the the prepping on business you. end kind of the should the kind run Scott, what's then ex you're then March. guidance of quarter? was for by question. worse first assumption better to or

Scott Haralson

February seasonally We sort smaller February than we we're Yes, inputs of month, right. Yes, by thanks to the for January and give than be a are can't in bit going a January lower little And hey March. you and March. Joe about but were that. talk I EBITDA margin in here, little know

sort can't I get bigger I components probably but point around are to to view we're you going But directional there those give number. help would to business so and is going to QX, amount, ready going bigger the XXXX. you be looking some we're will of get And today, in your So that probably be second QX, of to the things at in to of XX% invest in think your sizable QX. We're expect capacity sort number. that us, two-thirds around in expenses around growing now right I probably some for, at the full

side higher the grow going from as that a we to bit as business the going perspective. in But we're start they're expense see capacity. be we to to So efficiencies on little

Joseph DeNardi

Okay, is ex including two-thirds fuel fuel? or the

Scott Haralson

That's going total including fuel. to be op expenses

Operator

And our next Genovesi. question from Darryl

Darryl Genovesi

the at if can I make said sure will utilization. you And full I $X.XX happen you back just sub back I you correctly, to unit heard think costs that you're non-fuel in want it it's mid-XXXX. on get to frame Is fleet, capacity when you Scott, I cross the there, framework to sounds the XXXX you're using what view combine that some like with said view versus guide higher that understand capacity like on that right? XX% XXXX.

Scott Haralson

I yet. haven't of for fleet capacity proxy we could sort mean, about you that. as for Well, growth talked use, a XXXX

fleet out our numbers have there. We

we've XX - will have and XX in grow XXXX. year, We the at last airline, year, this aircraft XX grown

So a you But capacity. can for haven't sort yet. we given of do the number proxy

DeAnne Gabel

we capacity quarter was will the Yes, this is of in first XX% regarding XX% The think about quarter be second than we comment DeAnne. XXXX, of larger in XXXX. than were

Darryl Genovesi

RASM looking Scott the I what doing I'm I suggested. So what what And if guess I fleet given retirements deliveries, $X.XX just guiding risk basically that that's still like should some on below No, to a just five today, math And AXXX you of that I'm right. said a get to yes, seems be thanks is, what get I DeAnne, really to late to want up. fleet getting saw question the capacity you doing coming you're you the the I back at just that taking the type nominal demand have you lower you're essentially right, on is I think ex comment about said CASM of really XXXX to XXish your as percent kind by from make was a was was It here? imply? going boost lot sure XX%, target? to operating utilization, implied like of that.

Ted Christie

we below expect may or majority the of the The perhaps demand leisure And I be vast recovery. the not a Ted. demand be will component XX% over this believe approaching we today. And our might fact, or jump the it is XXX% parts at the true in XXX% is it's of don't demand here, level. in Nominal earlier true. may

of we're And pandemic capture over disrupt we've said last the going doesn't and portion think the going that. again, story. there's We be calls, to of couple so leisure our our demand necessarily this to still

business delivery changes those did so reasons, we to schedule. We not not our make to permanent for our And permanent did plan. - make changes

and have EBITDA. Now deploying been we with that we tactically, smart said about that don't penalize capacity making sure

founded changes is And But to the on our to all so, a we wrong, if and and this good - think if appears there now, would assumption theory. address for that make it's history assumption, appears lot be I current that.

Operator

Our next question Savi from Syth.

Savi Syth

the Scott, can training, coming maybe kind up its is be because you capacity in catch could of And of clarify still trying on understand the potentially if really just you XQ. much that's that going Because costs go where are away. just or I also of not - so going understand could understanding of costs I'm when? see spend to that of your than and that kind kind and chain, just aircraft quantify elevated might to much sequential guessing how more to maintenance elevated. I'm XQ is to And up those just trying how up of just as some much, this sequentially

an get to quantify I understanding, you help could trying that? I'm and if was So wondering

Scott Haralson

I half that's drive, costs you, increase. to when QX, for capacity so increase right going probably Yes, that's we about Savi. of the talk mean into

probably of aircraft have XX to The XX get other driven had catch us, We we're maintenance good events, will going through, do. probably by, that'll to months expenses. parked, a to portion be up take portion

and to it new spend engines, expenses be the And the crew, to hires. will million maintenance on going period. expenses other call air So it that heavy these probably that's the last $XX will catch-up we both we'll be catch-up of through really training expect through And for it components, frame year. be,

the will things happen, and can't snap those fingers airline of ready to you and all go. have your So

will months to it. will do XX take money it So And to it some to do XX cost that. us

Savi Syth

- how the of from cancellations, purchasing just that And and of then new that's of sales is - talked you've kind your about percentage versus just credits And super ATL kinds now, just And what helpful. these in right cash of much on of are credits. credit kind the I'm I know cancellations? curious

Scott Haralson

Savi, is Scott. this

$XXX in is ATL we're So balance million roughly the range. probably million, $XXX

XX form And are credit in shells least perspective, ATL at credit change and from percent of proxy. our in to of coming a shells, bookings point. is of will over So of don't the the a in time, probably plus this but good XX% redemption XX% at sitting know the if I we're that's probably range probably that

Operator

question next our from McKenzie. And Dan

Dan McKenzie

it behavior. can I elaborate wonder just card new drive and how change the a on might if bit deal you little a in credit

base to say So up passenger could of maybe more And three years the credit possibly pay card ultimately could more, maybe your to like years? miles? program five more three travel rack XX% the what what percent likely from is historical economics of say to now, look this in revenue,

Matt Klein

would and the new are traffic repeat of things reliable really how question also Matt. tell deal you card reliable the how can there. with that. We're loyalty we - answer we're try going out product expectation is detail based pretty model is is the will you well. are not that going at credit consistent and some But and repeat create for that to exactly our on our onto the already like program to to - it's I and and more as getting totally traffic us good plane the as on that Dan, your not that share Hi, I willing ready that

and So rates. high that repeat very creates in itself of has

have you on design to things more we've people travel internally, done are will theory. that's that's think program the we In model. passengers we how terms But to tell but incentive many engage what for And that that gives to going I of for all us paper. with all the

terms repeat want And for their a their rate itself ancillaries onto to get is adding more we itinerary, So we that people trip. create to rewarded and higher in going and the onto those lead of that into that as believe future, and on of aircraft. to and acquisition a customer marketing expense, translates efficiency higher in holistically that the brand revenue of pieces in all

drive that better in us will should that key and be of stronger the get All a component through. program helping loyalty with a credit card

DeAnne Gabel

are we to for of us soon. you talk we time all And with again that, out but will and thank for the day, today joining you

Ted Christie

Thank you.

Scott Haralson

Thanks.

Operator

This gentleman. and ladies conference. you for today's your Thank Thank concludes you participation.

You may now disconnect.

Spirit Airlines (SAVEQ) 11 Feb 212020 Q4 Earnings call transcript