Spirit Airlines, Inc. (NYSE: SAVE) today reported second quarter 2019 financial results.
"Our team once again delivered strong quarterly profits. In the second quarter 2019, we improved our operating margin by 300 basis points and delivered very strong earnings growth." said Ted Christie, Spirit’s President and Chief Executive Officer. "Operationally, we experienced numerous storm systems across our network which negatively impacted our operational reliability. However, on a relative basis, year-to-date through June 30, 2019 we still rank among the best in the industry for on-time performance2. I want to thank the entire Spirit team for all that they do every day to care for our Guests, especially during this busy travel season under challenging operational conditions."
For the second quarter 2019, Spirit's total operating revenue was $1,013.0 million, an increase of 18.9 percent compared to the second quarter 2018, driven by an 18.4 percent increase in flight volume and increases in both yields and load factor.
Total operating revenue per available seat mile ("TRASM") for the second quarter 2019 increased 5.0 percent compared to the same period last year. During the second quarter 2019, the Company's results benefited from its strategic network changes, revenue management initiatives, and a strong underlying demand environment. In addition, the Company estimates the calendar shift of Easter from the first quarter in 2018 to the second quarter in 2019 contributed approximately 200 basis points to the TRASM improvement.
Non-ticket revenue per passenger flight segment for the second quarter 2019 increased 1.8 percent to $55.543. Fare revenue per passenger flight segment decreased 1.0 percent to $57.60 and total revenue per passenger segment increased 0.3 percent year over year to $113.14.
For the second quarter 2019, total GAAP operating expenses increased 14.2 percent year over year to $849.0 million. Adjusted operating expenses for the second quarter 2019 increased 14.8 percent year over year to $847.5 million4. These changes were primarily driven by higher flight volume, higher passenger re-accommodation expense, higher salaries, wages and benefits, and airport rent and landing fees.
Aircraft fuel expense increased in the second quarter 2019 by 7.6 percent year over year, due to a 15.4 percent increase in fuel gallons consumed.
Spirit reported second quarter 2019 cost per available seat mile ("ASM"), excluding operating special items and fuel (“Adjusted CASM ex-fuel”), of 5.41 cents4, up 4.6 percent compared to the same period last year. As previously disclosed, a severe storm system impacted a large majority of Spirit’s flights to and from Florida during the Easter holiday weekend. As a result, the Company canceled numerous flights and incurred costs of about $6 million for passenger re-accommodation and disrupted crew expense. The additional expense and loss of ASMs related to this storm contributed approximately 150 basis points to adjusted CASM ex-fuel year over year percent change for the second quarter 2019. In addition to the Easter storm, the Company experienced multiple storm-related flight disruptions throughout the rest of the quarter which drove additional passenger re-accommodation expense. Higher ground handling rates, amortization expense, and other items contributed to the adjusted CASM ex-fuel change year over year.
Spirit ended the second quarter 2019 with unrestricted cash, cash equivalents, and short-term investments of $1.2 billion. For the six months ended June 30, 2019, Spirit generated $341.0 million of operating cash flow, after investing $238.5 million, primarily for aircraft purchases and pre-delivery deposits. Adjusted for proceeds from issuance of long-term debt, operating cash flow for the quarter ended June 30, 2019 was $205.2 million5. For the six months ended June 30, 2019, net cash provided by financing activities was $3.5 million.
Spirit took delivery of two new aircraft (one A320ceo and one A320neo) during the second quarter 2019, ending the quarter with 135 aircraft in its fleet.