Spirit Airlines, Inc. (NYSE: SAVE) today reported fourth quarter and full year 2020 financial results.

Ended the year 2020 with $1.9 billion of unrestricted cash, cash equivalents

and short-term investment securities

 Fourth Quarter 2020 Fourth Quarter 2019
 As Reported Adjusted As Reported Adjusted
 (GAAP) (non-GAAP) 1 (GAAP) (non-GAAP) 1
Total Operating Revenues$498.5 million $498.5 million $969.8 million $969.8 million
EBITDA$(87.8) million $(88.8) million $186.5 million $191.5 million
EBITDA Margin (17.6)%  (17.8)%  19.2%  19.7%
Pre-tax Income (Loss)$(204.5) million $(205.5) million $106.8 million $111.7 million
Net Income (Loss)$(157.3) million $(157.7) million $81.2 million $85.0 million
Diluted Earnings (Loss) Per Share$(1.61) $(1.61) $1.18  $1.24 

“Soft demand driven by pandemic-related concerns continues to have a significant impact on our operating results. However, our leading low-cost structure remains a key advantage and positions us well to compete in this environment and beyond. Our load factor and Adjusted EBITDA margin for the fourth quarter 2020 are among the best in the industry, illustrating the strength of our business model,” said Ted Christie, Spirit’s President and Chief Executive Officer. “While the road to recovery is anticipated to be choppy, we are confident we will be among the first U.S. carriers to return to profitability.”

Spirit continues to be recognized for a strong reputation within the airline industry and across all industries. The company’s latest accolade was being named to FORTUNE's 2021 list of World's Most Admired® Companies. Spirit is one of only three U.S. airlines included on the list, which surveyed top executives and directors from eligible companies, industry experts and financial analysts.

As the COVID-19 pandemic continues to evolve, the Company's financial and operational outlook remains subject to change. The Company continues to monitor the impacts of the pandemic on its operations and financial condition, and to implement mitigation strategies while working to preserve cash and protect the long-term sustainability of the Company. Spirit has implemented measures for the safety of its Guests and Team Members as well as to mitigate the impact of the COVID-19 on its financial position and operations. Please see the Company's Annual report on Form 10-K for the period ending December 31, 2020 for additional disclosures regarding these measures.

Capacity and Operations
The Company continues to see a significant negative impact to demand for air travel due to the COVID-19 pandemic. Load factor for the fourth quarter 2020 was 71.5 percent on a year-over-year capacity decrease of 25.4 percent.

For the full year 2020, Spirit delivered an outstanding operational performance, with a Completion Factor2 of 97.9 percent and an on-time performance2 of 86.7 percent, as measured by the DOT. For the full year 2020, Spirit expects it will be ranked first in Completion Factor2 and third in on-time performance2 among reporting carriers.

Revenue Performance
Total operating revenues for the fourth quarter 2020 were $498.5 million, a decrease of 48.6 percent year over year as the COVID-19 pandemic continues to severely affect demand for air travel.

For the fourth quarter 2020, total revenue per passenger flight segment ("Segment") decreased 14.5 percent year over year to $94.64. Fare revenue per Segment decreased 25.6 percent to $39.22 while non-ticket revenue per Segment only decreased 4.5 percent to $55.423.

Cost Performance
For the fourth quarter 2020, total GAAP operating expenses were $658.4 million, a decrease of 22.1 percent year over year. Adjusted operating expenses for the fourth quarter 2020 were $659.4 million4, a decrease of 21.5 percent year over year. These changes were primarily driven by a decrease in both fuel rate and volume compared to the fourth quarter last year. Despite the significant decrease in flight volume compared to the fourth quarter last year, some volume-related expenses increased year over year. For example, landing fees and other rents increased 6.8 percent year over year due to rate increases at various airports Spirit serves; and salaries, wages, and benefits ("SWB") increased 3.1 percent due to an increase in crew members prior to the hiring freeze that followed the onset of COVID-19 pandemic. The SWB related to additional crew members was partially offset by Team Members who participated in voluntary leave programs.

Spirit took delivery of two new A320neo aircraft during the fourth quarter 2020, one of which was debt financed and the other was financed through a sale/leaseback transaction. The Company ended the year with 157 aircraft in its fleet.

Liquidity and Capital Deployment
Spirit ended the year with unrestricted cash, cash equivalents, and short-term investment securities of $1.9 billion. Daily cash burn5 in the fourth quarter 2020 averaged $1.8 million.

Total capital expenditures for the full year 2020 were approximately $537 million (approximately $194 million net of financings).

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. This new legislation extends the Payroll Support Program ("PSP2") of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") through March 31, 2021. In late December, the Company notified the U.S. Department of the Treasury ("Treasury") of its intent to participate in the PSP2, and entered into an agreement with the Treasury in connection with this PSP2 funding on January 15, 2021. The Company expects to receive approximately $184.5 million pursuant to the PSP2. In January 2021, the Company received the first installment of $92.2 million in the form of a grant. Of the remaining amount, the Company expects that approximately $25 million will be in the form of a low-interest, 10-year loan. Also, in connection with its participation in PSP2, the Company is required to issue warrants to the Treasury to purchase up to 103,761 shares of the Company's common stock at a strike price of $24.42 per share (the closing price of the shares of the Company's common stock on December 24, 2020).

“Our fourth quarter Adjusted EBITDA margin of negative 17.81 percent was in line with our revised guidance, with revenue coming in as expected and non-fuel costs coming in slightly better. In the first quarter 2021, we are facing new travel restrictions and state quarantine requirements which have temporarily stalled the demand recovery. In addition, we are seeing a recent rise in fuel prices compared to the fourth quarter 2020. As such, we estimate our first quarter 2021 Adjusted EBITDA margin will be between negative 45 to negative 55 percent, assuming a fuel price per gallon of $1.75,” said Scott Haralson, Spirit’s Chief Financial Officer. “While these short-term developments are frustrating, sentiment is improving and we are well-positioned to succeed as demand recovers."