Spirit Airlines 2013 Annual Report Download - page 4

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PART I
ITEM 1. BUSINESS
Overview
Spirit Airlines is an ultra low-cost, low-fare airline based in Miramar, Florida that offers affordable travel to price-
conscious customers. Our all-Airbus fleet currently operates more than 250 daily flights to over 50 destinations in the United
States, Caribbean and Latin America. We completed an initial public offering during the second quarter of 2011, and our stock
trades on the NASDAQ Global Select Stock Market under the symbol "SAVE".
Our ultra low-cost carrier, or ULCC, business model allows us to compete principally through offering low base fares and
charging separately for select optional services, thereby allowing customers the freedom to save by choosing only the extras
they value. We have unbundled components of our air travel service that have traditionally been included in base fares, such as
baggage and advance seat selection, and offer them as optional, ancillary services (which we record in our financial statements
as non-ticket revenue) as part of a strategy to enable our passengers to identify, select and pay only for the services they want to
use.
Our History and Corporate Information
We were founded in 1964 as Clippert Trucking Company, a Michigan corporation. We began air charter operations in
1990 and renamed ourselves Spirit Airlines, Inc. in 1992. In 1994, we reincorporated in Delaware, and in 1999 we relocated
our headquarters to Miramar, Florida.
Our mailing address and executive offices are located at 2800 Executive Way, Miramar, Florida 33025, and our telephone
number at that address is [phone]. We are subject to the information and periodic reporting requirements of the
Securities Exchange Act of 1934, or Exchange Act, and, in accordance therewith, file periodic reports, proxy statements and
other information with the Securities and Exchange Commission or SEC. Such periodic reports, proxy statements and other
information are available for inspection and copying at the SEC's Public Reference Room at 100 F Street, NE., Washington,
DC 20549 or may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website at http://
www.sec.gov that contains reports, proxy statements and other information regarding issuers that file electronically with the
SEC. We also post on the Investor Relations page of our website, www.spirit.com, a link to our filings with the SEC, our
Corporate Governance Guidelines and Code of Business Conduct and Ethics, which applies to all directors and all our
employees, and the charters of our Audit, Compensation, Finance and Nominating and Corporate Governance committees. Our
filings with the SEC are posted as soon as reasonably practical after they are filed electronically with the SEC. Please note that
information contained on our website is not incorporated by reference in, or considered to be a part of, this report. You can also
obtain copies of these documents free of charge by writing to us at: Corporate Secretary, Spirit Airlines, Inc., 2800 Executive
Way, Miramar, Florida 33025.
Our Business Model
Our ULCC business model provides customers very low base fares with a range of optional services, allowing customers
the freedom to choose only the extras they value. The success of our model is driven by our low cost structure, which permits
us to offer very low base fares while maintaining one of the highest profit margins in the industry.
We are focused on price-sensitive travelers who pay for their own travel, and our business model is designed to deliver
what we believe our customers want: low fares. We aggressively use low fares to stimulate air travel demand in order to
increase passenger volume, load factors and non-ticket revenue on the flights we operate. Higher passenger volumes and load
factors help us sell more ancillary products and services, which in turn allows us to reduce the base fare we offer even further,
stimulating additional demand. We strive to be recognized by our customers and potential customers as the low-fare leader in
the markets we serve.
We compete based on total price. We believe other airlines have used an all-inclusive price concept to effectively raise
total prices to consumers, rather than lowering fares by unbundling each product or service. For example, carriers that tout
“free bags” have included the cost of checking bags in the total ticket price, not allowing passengers to see how much they
would save if they did not check luggage. We believe that we and our customers benefit when we allow our customers to know
the total price of their travel by breaking out the cost of additional, optional products or services. Before they pay, our
customers are easily able to compare the total cost of flying with us versus flying with another airline.
We allow our customers to see all available options and their prices prior to purchasing a ticket, and this full transparency
illustrates that our total prices are lower, on average, than our competitors, even when options are included.