MIAMI — After a news-filled Wednesday, Spirit Airlines shares rose 4.6% after the carrier announced positive earnings and a memorandum of understanding (MOU) for the purchase of 100 new Airbus aircraft.
The company released quarterly earnings per share of $1.32, above Wall Street’s prediction of $1.27. Reported revenues of $992 million represent a 10% year-over-year growth from last year when revenues reached only $904 million.
While revenues grew, operating RASM (revenue per available seat mile), a measurement used to compare airlines’ efficiency, declined 1.7% year-over-year, partially a result of Hurricane Dorian and lower passenger yields.
Nevertheless, the company had other reasons to celebrate. The airline announced last week that it expects to open its new Dania Beach corporate headquarters in mid-2022, a measure further solidifying the company’s presence and future in South Florida.
Order for 100 new Airbus A320neo
In addition to positive earnings, the airline announced a deal with Airbus to purchase 100 new Airbus A320neo family aircraft. The arrangement offers a mix of Airbus A319, A320, and A321neo models with deliveries expected through 2027.
The memorandum also affords Spirit the option to purchase 50 additional Airbus aircraft if the airline desires.
The carrier already operates 138 Airbus A320 family aircraft, with seven additional A320neo models expected to be delivered by the end of 2019.
In the following two years, the company expects to add another 48 aircraft of the same model.
President and CEO, Ted Christie, demonstrated his support for the deal, saying, “The additional aircraft will be used to support Spirit’s growth as we add new destinations and expand our network across the U.S, Latin America, and the Caribbean. We look forward to working with our valued partners at Airbus to finalize our agreement.”
The deal also comes as the first large success for Airbus after tariffs were imposed upon the aircraft manufacturer last week. The Trump administration levied a 10% tariff on the European company after continued strain regarding aircraft subsidies.
On top of building out its operating fleet, Spirit aims to enhance its passenger experience with the release of its cabin redesign, a feature of its “Invest in the Guest” endeavor. The airline is expected to roll out the changes in December of this year.
Like other airlines, including Delta, Spirit intends to improve the customer’s in-flight experience through a redesigned, more comfortable interior. New seats – aside from being comfier – will feature additional legroom, greater lumbar support, and a full-size tray table.
To add to the benefits, Spirit’s middle seats will be an inch wider, while every passenger will receive at least an inch of pre-recline.
The news is likely to be met with great excitement from Spirit flyers, who have expressed disapproval of the budget airline’s meager offerings in the past.