2/10/2015 0 Comments
The positive surprise in Spirit Airline's report is in their adjusted cost per available seat mile (CASM) ex-fuel. The adjusted CASM ex-fuel dropped -2.9% to 5.61 cents in Q4 from 5.78 cents in the year-ago quarter. This lower adjusted CASM ex-fuel is below the guidance Spirit gave in January of adjusted CASM ex-fuel down 2% year-over-year. Spirit guided Q1 CASM down -4% to -6%, and guided full-year 2015 CASM down -6% to -8%. These cost reductions were larger than expected and the stock was goosed higher when these forecasts were announced on the conference call.
Michael Grove, CFA