Spirit Airlines 2011 Annual Report Download - page 61

increased 35.1% to $35.00 in 2010 from $25.91 during 2009. Also during 2010, we no longer sold our Big Front Seat
®
as a separate fare but
instead charged a premium seat upgrade fee, which shifted revenue from passenger revenue to non-ticket revenues. In August 2010, we
introduced a fee for carry-on bags, resulting in a significant reduction in the number of carry-on bags checked at the gate. In the fourth quarter of
2010, the first full quarter of the carry-
on bag fee, we experienced an increase in total bag revenue per passenger segment to $16.82, compared to
$9.59 in the fourth quarter of 2009. We also believe these changes are helping us reduce the time it takes to board and unload our aircraft and
thereby permit us to turn our aircraft more quickly when compared to turn-around times during the comparable prior year periods when no carry-
on bag fee was in place.
Operating Expenses
Since adopting our ultra low-cost model, we have continuously sought to reduce our unit operating costs and have created what we believe
is one of the lowest cost structures in our industry in the Americas. The table below presents our operating expenses, as a percentage of operating
revenue for the last three years, as well as unit operating costs (CASM).
53
Year Ended December 31,
2011
2010 2009
% of
Revenue
CASM
% of
Revenue
CASM
% of
Revenue
CASM
Operating revenue
100.0 %
100.0 %
100.0 %
Operating expenses:
Aircraft fuel (1)
36.2
%
4.15
¢
31.8
%
3.06
¢
25.9
%
2.42
¢
Salaries, wages, and benefits
17.0
1.94
20.0
1.93
19.3
1.81
Aircraft rent
10.9
1.25
13.0
1.25
12.9
1.20
Landing fees and other rentals
4.9
0.56
6.2
0.59
6.0
0.56
Distribution
4.8
0.55
5.3
0.51
4.9
0.46
Maintenance, materials and repairs
3.3
0.38
3.6
0.35
3.9
0.37
Depreciation and amortization
0.7
0.08
0.7
0.07
0.7
0.07
Other operating expenses
8.4
0.96
10.6
1.02
10.4
0.97
Loss on disposal of assets —
— — —
0.1
0.01
Special charges (2)
0.3
0.03
0.1
0.01
(0.1
)
(0.01
)
Total operating expense
86.5
%
91.2
%
84.1
%
CASM
9.91
¢
8.77
¢
7.86
¢
MTM gains (losses) per ASM
0.03
0.03
0.02
Restructuring per ASM
0.03
0.01
(0.01
)
Adjusted CASM (excludes Restructuring
and MTM gains (losses)
9.84
8.79
7.89
Adjusted CASM excluding fuel
5.72
5.71
5.45
(1) Aircraft fuel expense is the sum of (i) “into-plane fuel cost,” which includes the cost of jet fuel and certain other charges such as fuel
taxes and oil, (ii) settlement gains and losses, and (iii) unrealized mark-to-market gains and losses associated with fuel hedge contracts.
The following table summarizes the components of aircraft fuel expense for the periods presented:
Year Ended December 31,
2011
2010 2009
(in thousands)
Into-plane fuel cost
$
392,278
$
251,754
$
181,806
Settlement (gains) losses
(7,436
)
(1,483
)
750
Unrealized mark-to-market (gains) losses
3,204
(2,065
)
(1,449
)
Aircraft Fuel
$
388,046
$
248,206
$
181,107