MIRAMAR, Fla. (AP) — Spirit Airlines Inc.'s net income rose 23 percent in the first quarter on rapidly growing traffic, but the airline said second-quarter costs other than fuel will rise. Its shares fell in afternoon trading.
Spirit advertises low fares but relies heavily on charging more fees than most other airlines, including charging extra to buy a ticket online or stow a bag in the overhead bin.
In the first quarter, passengers paid less per flight for their ticket than a year ago, but they spent more on fees, so they paid Spirit about the same per trip, $134.20.
"We are just fine with this trade-off and actually prefer it," CEO Ben Baldanza said on a conference call with analysts.
Spirit needs to control expenses to keep fares low. It said that second-quarter costs other than fuel will rise by between 2 percent and 3 percent compared with a year earlier. The same figure rose just 0.3 percent in the first quarter.
Shares fell $1.59, or 2.7 percent, to $56.84 in late afternoon trading. They have still more than doubled over the past year.
The Miramar, Florida-based airline has ambitious expansion plans. It expects to boost passenger-carrying capacity by 18 percent this year, up from an earlier forecast of 17 percent growth, and increase its fleet to 65 jets from 56 by year end. Last week it announced plans to start flights to Kansas City. Baldanza said Spirit might add another destination or two this year but will mostly add routes that connect cities it already serves.
In the first quarter, Spirit earned $37.7 million, or 51 cents per share, up from $30.6 million, or 42 cents per share, a year ago. Excluding items, earnings were 52 cents per share, a penny better than analysts polled by FactSet had expected.
Revenue increased 18 percent to $438 million, just shy of Wall Street's $438.4 million forecast.
There were 256 weather-related flight cancellations in the quarter, about four times as many as a year earlier. Still, traffic rose 24 percent and the average flight was 86.9 percent full, up from 85.1 percent a year earlier.