Spirit Airlines 2013 Annual Report Download - page 21

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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 and in August 2013, we experienced another 13 hour outage that affected our sales and customer service response
times. 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.
We are subject to cyber security risks and may incur increasing costs in an effort to minimize those risks.
Our business employs systems and websites that allow for the secure storage and transmission of proprietary or
confidential information regarding our customers, employees, suppliers and others, including personal identification
information, credit card data and other confidential information. Security breaches could expose us to a risk of loss or misuse of
this information, litigation and potential liability. Although we take steps to secure our management information systems, and
although multiple auditors review and approve the security configurations and management processes of these systems,
including our computer systems, intranet and internet sites, email and other telecommunications and data networks, the security
measures we have implemented may not be effective, and our systems may be vulnerable to theft, loss, damage and interruption
from a number of potential sources and events, including unauthorized access or security breaches, natural or man-made
disasters, cyber attacks, computer viruses, power loss, or other disruptive events. We may not have the resources or technical
sophistication to anticipate or prevent rapidly evolving types of cyber attacks. Attacks may be targeted at us, our customers and
suppliers, or others who have entrusted us with information. In addition, attacks not targeted at us, but targeted solely at
suppliers, may cause disruption to our computer systems or a breach of the data that we maintain on customers, employees,
suppliers and others.
Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and
protection technologies, train employees and engage third-party experts and consultants, or costs incurred in connection with
the notifications to employees, suppliers or the general public as part of our notification obligations to the various governments
that govern our business. Advances in computer capabilities, new technological discoveries, or other developments may result
in the breach or compromise of technology used by us to protect transaction or other data. In addition, data and security
breaches can also occur as a result of non-technical issues, including breaches by us or by persons with whom we have
commercial relationships that result in the unauthorized release of personal or confidential information. Our reputation, brand
and financial condition could be adversely affected if, as a result of a significant cyber event or other security issues: our
operations are disrupted or shut down; our confidential, proprietary information is stolen or disclosed; we incur costs or are
required to pay fines in connection with stolen customer, employee or other confidential information; we must dedicate
significant resources to system repairs or increase cyber security protection; or we otherwise incur significant litigation or other
costs.