SPIRIT

AIRLINES
P R E S E N T E D B Y:
BISMA NAWAZ, LAIBA MAHMOOD,
SHAHRUKH KHAN, WASIF AHMAD
THE ULTRA-LOW COST
AIRLINE FOR THE
AMERICAS.
INTRODUCTION
• Founded in Michigan in 1964.
• Headquartered in Miramar, Florida.
• Competes in Ultra-low Cost Carrier (ULCC)
airline industry in USA, Caribbean and Latin
America.
• Employees more than 3,033 full time
employees.
• Target customers who are willing to afford
their own travel expenses rather than
business class customers.
AMERICAN JETBLUE DELTA AIRLINES
HEADQUARTER: HEADQUARTER: HEADQUARTER:
Fort Worth, Texas. Long Island City, Atlanta Georgia.
New York.
DAILY FLIGHTS: DAILY FLIGHTS: DAILY FLIGHTS:
3400. 700 approx. 342.
CITIES: 250 COUNTRIES: 22. COUNTRIES: 61.
COUNTRIES: 50 CARIBBEAN AIRCRAFTS: 700.
destinations: 23.
Declining market Provides best in- “Top Tech-friendly”
share and an flight USA Airline.
expected merger entertainment. Industry leading
with US Airways. Focuses on global network.
sustainable SkyMiles – largest
strategy. frequent flier
 STATISTISTICS
FINANCIAL COMPARISON WITH
TOP TWO COMPETITORS
SPIRIT AMERICAN JETBLUE
MARKET 1.6B 174M 1.6B
CAPITALIZATION
NUMBER OF 3.1K 80.1K 11.9K
EMPLOYEES
REVENUE 1.14B 25.5B 4.7B
GROSS MARGIN 0.28 0.20 0.28
NET INCOME 92M (3.2B) 113M
EPS 1.41 (9.55) 0.35
P/E Ratio 15.71 N/A 16.15
CONT’D
SPIRIT’s REVENUE TREND (2009-2012)

LATIN
DOMESTIC
AMERICA
13.79% TO
9.85% TO
26.11%
7.01%

TOTAL 23.64%
TO 33.12%
 CONT’D
SPIRIT’s FINANCIAL STATEMENT ANALYSIS
• NI 2011:
45.00%
40.00%
5.47%; 2012:
35.00% 41.87%
30.00%
25.00%
20.00% • OPERATING
2012
15.00% EXPENSES
10.00% 2011
5.00%
2011:
0.00% 30.09%;
NET OPERATING 2012:
INCOME EXPENSES 23.47%
CONT’D
2012 2011
TOTAL ASSETS $919,884 $745,813
CURRENT $547,357 $442,708
ASSETS
TOTAL $60,455 $52,043
LIABILITIES
CURRENT $276,894 $227,064
LIABILITIES
LIQUIDITY 1.97 1.94
 QUALITATIVE DATA
SPIRIT flight cost includes, water and snacks, luggage and
seat selection.

SPIRIT has rearranged its plane for high density seating.

HUBS: Ft. Lauderdale, Myrtle Beach, Atlantic city.

SPIRIT leases planes rather than buys planes.

Its high density plane seating have a total of 145.

ISSUES/PROBLEMS
 OIL PRICES
One of the largest absorbers of
revenue in the airline industry.
$147 fuel per barrel caused
36% of revenue drain.

ECONOMIC  LABOR
Second largest expense for
ISSUES airline industry. SPIRIT has 54%
of its labor force presented by
labor unions, which have
caused an increase in cost of
labor .
 INCREASED TAXES
 Airlines have invested in more fuel
– efficient designs of planes and
ENVIRONMENTAL engines but the critics suggest
that airlines are only undertaking
ISSUES these measures to cut off its own
fuel burden regardless of the
environment.

No contracts with any other

OTHERS airlines.
 CORE PROBLEM
SPIRIT HAS 54% OF ITS LABOR
FORCE PRESENTED BY LABOR
UNIONS, WHICH HAVE CAUSED
AN INCREASE IN COST OF
LABOR.
ONE RECOMMENDED
SOLUTION

FACILITATE THE LABOR FORCE

WITH WAGE CONTRACTS.