Spirit Airlines 2011 Annual Report Download - page 10

Experienced Operator in the Region. We believe we have substantial experience in local aviation, security and customs regulations, local
ground operations and flight crew training required for successful international and overwater flight operations. All of our aircraft are certified
for overwater operations. We believe we compete favorably against other low-cost carriers because we have been conducting international flight
operations since late 2003 and we have developed substantial experience in complying with the various regulations and business practices in our
targeted growth regions.
Financial Strength Achieved by Cost Discipline Focus . We believe our ULCC business model has delivered strong financial results in
difficult economic times. We have generated these results by:
Our Strategy
Our goal is to offer compelling value to our customers by utilizing our low-cost structure and unbundled pricing strategy and, in so doing,
grow profitably and enhance our position among the leading low-cost carriers in the Americas. Through the following key elements of our
business strategy, we seek to:
Maintain Low Unit Operating Costs . We will support our low-fare strategy by seeking to reduce unit operating costs and improve
efficiency by, among other things:
Couple Low Fares with Expanded Ancillary Services to Stimulate Traffic and Generate More Stable Revenues . Our low unit costs
enable us to operate profitably at low-fare levels, and we intend to continue reducing base fares to stimulate demand from price-sensitive
customers. By stimulating traffic, our goal is to maximize non-ticket revenues by increasing passenger volume and load factor, which is the
percentage of seats actually occupied on a flight. We plan to continue expanding our portfolio of ancillary products and services, through new
programs and enhancements to existing offerings. We also seek to maximize revenue opportunities through multiple interactions with customers
at different stages of their travel, from pre-purchase through travel and post-
trip. As we broaden the ancillary products and services we sell to our
customers and increase non-ticket revenues, we believe we will be able to further lower base fares while maintaining profitability, thereby
further stimulating demand while adding stability to our revenue stream. Additionally, our innovative fuel pass-
through separately shows the fuel
cost component of the base fare, providing fare transparency to consumers while encouraging a fare strategy with disciplined cost coverage.
Profitably Expand Our Network in Attractive Caribbean, Latin American and U.S. Domestic Markets
. We anticipate further penetrating
attractive international and domestic markets currently underserved by low-cost carriers by increasing frequency and aircraft capacity on our
existing routes, as well as by starting new routes to cities we do not yet serve. We believe we can accomplish this by:
•
keeping a consistent focus on maintaining low unit operating costs;
•
maintaining disciplined capacity control and fleet size;
•
ensuring our sourcing arrangements with key third parties are continually benchmarked against the best industry standards; and
•
maintaining a simple operation that focuses on delivering transportation.
• deploying additional cost-efficient Airbus A320-family aircraft for high-
utilization flying;
• spreading our low fixed-cost infrastructure over a larger-
scale operation;
•
continuing to leverage our Fort Lauderdale base of operations;
•
opportunistically outsourcing operating functions;
•
using technology to create further operating efficiencies;
• leveraging the labor productivity and scale benefits of our five-
year pilot contract; and
•
continuing our aggressive procurement strategy.
• using our knowledge of local U.S. domestic, Caribbean and Latin American markets and expertise in local regulatory and business
practices to optimize our route structure and schedule;
• pursuing attractive new route opportunities in markets that limit air carrier competition through frequency or carrier designation
restrictions;