Low-cost Carrier’s Profits Soar

Once
again, low-cost and regional air carriers in the U.S. were more profitable than
legacy carriers, according to data released Monday by the U.S. Department of Transportation.


LCC

For
the first quarter, low-cost carriers – including Miramar-based Spirit
Airlines – reported a 2.4 percent operating profit margin, or $115
million. The top legacy network carriers, on the other hand, posted a margin
loss of 0.7 percent, or $163 million. Regional carriers posted an operating
profit of 3.9 percent, or $60 million.

With
$24 million in operating profit reported, Spirit, the leading carrier at Fort Lauderdale-Hollywood International Airport, posted the second-highest margin in the low-cost group, at 13.1 percent. Only Allegiant Air posted a higher margin, at 20 percent.

In the first quarter of 2009, however, Spirit posted a higher operating profit,
$28.8 million, and margin, 17.1 percent. Spirit’s operating revenue grew to
$184 million from $169.8 million.

Spirit
once again led the industry with the highest percentage of ancillary revenue of
any airline. With 21.7 percent of overall revenue derived from baggage fees,
reservation changes, etc., Spirit had more than double the ancillary revenue of
AirTran, which had the second-highest percentage, at 10.3 percent.

Starting
Aug. 1, the airline plans to start charging passengers up to $45 for carry-on
luggage.

On
June 16, Spirit settled a five-day pilots strike that started over salary and
benefits. The company resumed a full schedule on June 18, and pilots are
expected to ratify the tentative agreement in July.