Shares of Spirit Airlines Inc. rose Tuesday after the discount carrier reported that its fourth-quarter income jumped 33 percent despite lower average fares.
The fast-growing airline unexpectedly replaced its longtime CEO last month after Spirit's stock price fell by more than half in less than a year. Spirit was growing rapidly, but revenue per mile fell as competition increased.
New CEO Robert Fornaro, who ran AirTran before that airline was bought by Southwest, told analysts on a conference call Tuesday that he sees no need for Spirit to change its business model — low fares but fees for many extra services.
But, Fornaro said, the airline can improve its customers' experience by reducing flight delays and improving service. Spirit had by far the highest complaint rate among the 13 largest U.S. airlines in the most recent figures released by the Department of Transportation.
In afternoon trading, its stock was up $2.07, or 5 percent, to $42.45. It began the day up 1 percent in 2016 but down 47 percent from a year earlier.
The Miramar, Florida-based company said it had profit $74.4 million, or $1.04 per share. Earnings, adjusted for non-recurring gains, were $1.02 per share.
The results exceeded Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for adjusted earnings of 98 cents per share.
The airline posted revenue of $519.8 million in the period, up 9.6 percent from a year earlier.
Traffic soared 28 percent, but revenue from the average ticket fell 21 percent to $57.52 per passenger. Other revenue, mainly fees, was nearly unchanged at $54.26 per passenger.
For the year, the company reported profit of $317.2 million, or $4.38 per share. Revenue was reported as $2.14 billion.
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