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Spirit has the lowest cost structure in the industry, and its upgauging initiatives will only increase its lead over competitors. There is plenty of demand in the U.S. for cheap flights, and Spirit is poised to benefit from that untapped demand.
The airline industry as a whole is a tough investment. They are already pulling out of Mesa. As people figure out that they are paying just about as much for a flight with all the add on's as they would be on a major carrier, they will not retain customers.
An airline company that keeps raising revenue every quater. This is a company that is flying high and going even higher.
Magic Formula 11-29-12
Company stay,wants don't match customer experience. Slammed in social media and ratings. Horrible customer service, delays and worse. They may protect their margins right in to brand oblivion.
This is a low-cost carrier with rock-bottom fares and solid financials. Though the fees are unpopular, they bring in a lot of revenue.
Spirit Airlines has a business model that works because it allows customers the option to choose a fare tailored to them. People will always complain about paying for everything but my advice to them is get used to it. Many people have been out of work for so long that it is time that people pay and do their fair share in bringing them back to work. Ticket prices today are down 800% from 1990 so if people complain about bag fees they should rethink whether they want to pay $120 or $1200 more for the ticket. I feel good about Spirit and Allegiant Airlines. The airlines which may suffer great financial losses are Southwest and Delta. Both those airlines have too high of cost due to merger expense and contracts which are costly at a time when fuel prices are at an all time high. American airlines and United have struggling times ahead. Regional airlines like Pinnacle, Comair, ASA,Skywest and Republic will phase out and will force legacy carriers to cut that type of equipment out of the plan. I called Pinnacle's bankruptcy over 2 years ago before a new CEO Sean Menke was installed. It was clear to me that this meant all regional's were at the beginning of extinction. It just started with one regional and will catch up to all of them. I only hope that those pilots and flight attendants see this opportunity to find a home at a legacy carrier soon. Now is the time to make a change in the industry and strike while the iron is hot.
they are absolutely focused on having the lowest costs, to the point that it became a religion. There is no way you can outcompete them.
Based on expected forward earnings of $40m, with only 15.6m shares issued at a current per share price of about 11.50, SAVE has a forward P/E X of around 4.5. Competitors in the bargain space such as LUV and JBLU are trading at multiples 4-5 times higher. Now, the theory that SAVE is going to be undervalued all goes out the window if they have a secondary offering and dilute the earnings over more shares.
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