Spirit Airlines 2011 Annual Report Download - page 30

Our growth is dependent upon our ability to maintain a safe and secure operation and requires additional personnel, equipment and
facilities. An inability to hire and retain personnel, timely secure the required equipment and facilities in a cost-effective manner, efficiently
operate our expanded facilities or obtain the necessary regulatory approvals may adversely affect our ability to achieve our growth strategy,
which could harm our business. In addition, expansion to new markets may have other risks due to factors specific to those markets. We may be
unable to foresee all of the risks attendant upon entering certain new markets or respond adequately to these risks, and our growth strategy and
our business may suffer as a result. In addition, our competitors may reduce their fares and/or offer special promotions following our entry into a
new market. We cannot assure you that we will be able to profitably expand our existing markets or establish new markets.
Our target growth markets in the Caribbean and Latin America include countries with less developed economies that may be vulnerable to
unstable economic and political conditions, such as significant fluctuations in gross domestic product, interest and currency exchange rates, civil
disturbances, government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by
governments. The occurrence of any of these events in markets served by us and the resulting instability may adversely affect our ability to
implement our growth strategy.
In 2008, in response to record high fuel prices and rapidly deteriorating economic conditions, we modified our growth plans by terminating
our leases for seven aircraft. We incurred significant expenses relating to our lease terminations, and have incurred additional expenses to
acquire new aircraft in place of those under the terminated leases as we expand our network. We may in the future determine to reduce further
our future growth plans from previously announced levels, which may impact our business strategy and future profitability.
We rely heavily on technology and automated systems to operate our business and any failure of these technologies or systems or failure
by their operators could harm our business.
We are highly dependent on technology and automated systems to operate our business and achieve low operating costs. These
technologies and systems include our computerized airline reservation system, flight operations system, financial planning, management and
accounting system, telecommunications systems, website, maintenance systems and check-in kiosks. In order for our operations to work
efficiently, our website and reservation system must be able to accommodate a high volume of traffic, maintain secure information and deliver
flight information. Substantially all of our tickets are issued to passengers as electronic tickets. We depend on our reservation system, which is
hosted and maintained under a long-term contract by a third-party service provider, to be able to issue, track and accept these electronic tickets.
If our reservation system fails or experiences interruptions, and we are unable to book seats for any period of time, we could lose a significant
amount of revenue as customers book seats on competing airlines. We have experienced short duration reservation system outages from time to
time and may experience similar outages in the future. For example, in November 2010, we experienced a significant service outage with our
third-party reservation service provider on the day before Thanksgiving, one of the industry’s busiest travel days. We also rely on third-party
service providers of our other automated systems for technical support, system maintenance and software upgrades. If our automated systems are
not functioning or if the current providers were to fail to adequately provide technical support or timely software upgrades for any one of our key
existing systems, we could experience service disruptions, which could harm our business and result in the loss of important data, increase our
expenses and decrease our revenues. In the event that one or more of our primary technology or systems’ vendors goes into bankruptcy, ceases
operations or fails to perform as promised, replacement services may not be readily available on a timely basis, at competitive rates or at all and
any transition time to a new system may be significant.
In addition, our automated systems cannot be completely protected against events that are beyond our control, including natural disasters,
computer viruses or telecommunications failures. Substantial or sustained system failures could cause service delays or failures and result in our
customers purchasing tickets from other airlines. We have implemented security measures and change control procedures and have disaster
recovery plans; however, we cannot assure you that these measures are adequate to prevent disruptions. Disruption in, changes to or a breach of,
these systems could result in a disruption to our business and the loss of important data. Any of the foregoing could result in a material adverse
effect on our business, results of operations and financial condition.
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maintain profitability;
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obtain financing to acquire new aircraft;
• access airports located in our targeted geographic markets where we can operate routes in a manner that is consistent with our cost
strategy;
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gain access to international routes; and
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access sufficient gates and other services at airports we currently serve or may seek to serve.