February 7, 2022
The following are excerpts from a Spirit Airlines press release:
Today we announced that Spirit and Frontier have signed a definitive merger agreement under which we plan to combine to bring more ultra-low fares to more travelers in more destinations across the United States, Latin America and the Caribbean.* We are excited about this combination and believe it will have tremendous benefits for consumers, Team Members, and shareholders.
Since its initial onset in early 2020, the impact of the COVID-19 pandemic has evolved and continues to be fluid. Therefore, the Company’s financial and operational outlook remains subject to change. The Company continues to monitor the impact of the pandemic on its operations and financial condition, and to adjust its mitigation and operational strategies accordingly. Spirit has implemented measures for the safety of its Guests and Team Members as well as to mitigate the impact of 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, 2021 for additional disclosures regarding these measures.
The Company believes that providing analysis of financial and operational performance compared to fourth quarter 2019 is a more relevant measure of performance due to the severe impacts from the COVID-19 pandemic on our financial results and operational performance for 2020.
Fourth Quarter 2021 Results
Adjusted EBITDA for the fourth quarter 2021 was $14.9 million. The Company had an unusual number of operational disruptions and flight cancellations during the peak December 2021 holiday period, due to staffing shortages as a result of the rapid spread of the Omicron variant. The irregular operations during the peak December 2021 holiday period negatively impacted fourth quarter 2021 Adjusted EBITDA by approximately $30 million, primarily due to additional passenger re-accommodation expenses and higher labor expenses, partially offset by lower fuel expense and landing fees. Despite this impact, Adjusted EBITDA margin for the fourth quarter 2021 was 1.5 percent, better than the Company’s initial expectations of flat to negative 5 percent.
Forward Looking Guidance
Given the merger transaction announced today, the Company is not providing guidance at this time.
Full Year 2021 Highlights
- In 2021, Spirit maintained its focus on building an engaged workforce, while navigating COVID-19’s impact on its Team Members and a tightening labor market. The Company grew its workforce to 10,287 Team Members to support its growing organization, had the honor to be named as one of FORTUNE’s Most Admired Companies, and received Glassdoor’s OpenCompany designation, which recognizes employers that proactively promote and embrace workplace transparency
- Spirit launched a comprehensive Diversity, Inclusion, Equity and Belonging strategy in 2021, to drive meaningful change within the organization and the communities it serves. This includes employee resource groups (ERGs) organized by Team Members in order to ensure they all have a voice in paving our path; providing education to increase awareness of systemic inequities and to reduce bias; and a new Supplier Diversity program around a network of minority-owned business partners and diverse suppliers
Recognitions and Accomplishments
- Spirit was one of only three U.S. airlines listed on FORTUNE’s 2021 list of World’s Most Admired® Companies
- Spirit was awarded Platinum status by the Airline Passenger Experience Association (APEX) Health Safety initiative powered by SimpliFlying for the airline’s efforts in ensuring the highest standards of cleanliness and sanitization. The rating was the highest of any low-fare carrier in the world, and the certification recognizes Spirit for going above and beyond the required and truly investing in health and safety for Guests and Team Members
- Spirit was recognized by Forbes as one of America’s best companies for diversity, equity and inclusion. Forbes’ fourth annual list of America’s Best Employers For Diversity ranks the 500 employers that boast the most diverse boards and executive ranks, as well as the most proactive diversity and inclusion initiatives
- Spirit received two prestigious awards for its Self-Bag Drop and Biometric technology: The Company was a Gold Stevie winner from the Transportation category of the American Business Awards® program, and was named Best Airport Innovation in the APEX/IFSA Awards
- For the fourth year in a row, Spirit has achieved the FAA’s highest award for Technical Training, the Diamond Award of Excellence. This award is only achieved if 100% of technicians receive the FAA’s Aircraft Maintenance Technician (“AMT”) Certificate of Training.
Supporting our Communities
- Spirit is committed to inspiring positive change in the communities it serves, supporting local nonprofit organizations throughout its network via in-kind donations and Team Member volunteerism
- Alongside the Company’s efforts, the Spirit Airlines Charitable Foundation invested over $500,000 in non-profit organizations that have meaningful social impact on the lives of children and families, service members and the environment
Environmental, Social, Governance
- Spirit issued its inaugural 2020 Sustainability Report, showcasing results of the airline’s longstanding commitment to meaningful advancements in environmental sustainability, Guest and community service, Team Member support, and governance. Despite the global impact of COVID-19, Spirit remained dedicated to integrating environmental, social, and governance (“ESG”) practices into its business. The report highlights Spirit’s plans for continued progress in broadening ESG initiatives and improving communities and society at large. The Company’s 2020 Sustainability report is available at ir.spirit.com
Guest Experience and Loyalty
- Spirit launched a new Free Spirit® loyalty program in 2021—which offers the fastest way to earn rewards and status—alongside the new Spirit Saver$ Club®. Spirit also unveiled a pair of new credit cards with benefits that make every aspect of the new Free Spirit fly faster and further. The new Free Spirit is built around points because rewards will be based on dollars spent instead of miles flown. Members can earn points on every booking, every bag and every Big Front Seat®—plus all kinds of purchases on the new Free Spirit credit cards
- Spirit continued its progress on Wi-Fi antennae installations with more than 100 aircraft completed in 2021. As of year-end, the Company was conducting initial Wi-Fi testing on a limited number of planes. Guests onboard these flights were able to access the Wi-Fi service at a reduced rate during this temporary trial period.
*July 27, 2022 UPDATE: Spirit Airlines and Frontier Airlines have called off their merger. JetBlue Airways is expected to purchase Spirit Airlines.