Spirit Airlines 2014 Annual Report Download - page 8

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to this commonality among Airbus single-aisle aircraft, we can retain the benefits of a fleet comprised of a single type of
aircraft while still having the flexibility to match the capacity and range of the aircraft to the demands of each route.
As of December 31, 2014, we had a fleet of 65 Airbus single-aisle aircraft, consisting of 29 A319s, 34 A320s and 2
A321s, and the average age of the fleet was 5.1 years. As of December 31, 2014, we had 4 aircraft financed through senior and
junior long-term debt with terms of 12 and 7 years, respectively, and 61 aircraft financed under operating leases with
expirations between 2016 and 2025.
As of December 31, 2014, firm aircraft orders consisted of 101 A320 family aircraft (21 of the existing A320 aircraft
model, 40 A320neos, 30 of the existing A321 model and 10 A321neos) with Airbus and 5 direct operating leases for A320neos
with a third-party lessor. As of December 31, 2014, spare engine orders consisted of five V2500 SelectOne engines with IAE
and nine PurePower PW 1100G-JM engines with Pratt & Whitney. Aircraft are scheduled for delivery from 2015 through 2021
and spare engines are scheduled for delivery from 2015 through 2024. The firm aircraft orders provide for capacity growth as
well as the flexibility to replace all or some of the 65 aircraft in our present fleet. We may elect to supplement these deliveries
by additional acquisitions from the manufacturer or in the open market if demand conditions merit.
Consistent with our ULCC business model, each of our aircraft is configured with a high density seating configuration,
which helps us maintain a lower unit cost and pass savings to our customers. Our A319s accommodate 145 passengers
(compared to 128 on United and American Airlines), our A320s accommodate 178 passengers (compared to currently 150 on
United and JetBlue) and our A321s accommodate 218 passengers (compared to a current maximum of 181 on American
Airlines and 190 on JetBlue).
Maintenance and Repairs
We have a Federal Aviation Administration (FAA) mandated and approved maintenance program, which is administered
by our technical services department. Our maintenance technicians undergo extensive initial and ongoing training to ensure the
safety of our aircraft.
Aircraft maintenance and repair consists of routine and non-routine maintenance, and work performed is divided into
three general categories: line maintenance, heavy maintenance and component service. Line maintenance consists of routine
daily and weekly scheduled maintenance checks on our aircraft, including pre-flight, daily, weekly and overnight checks, and
any diagnostics and routine repairs and any unscheduled items on an as needed basis. Line maintenance events are currently
serviced by in-house mechanics supplemented by contract labor and are primarily completed at airports we currently serve.
Heavy airframe maintenance checks consist of a series of more complex tasks that can take from one to four weeks to
accomplish and typically are required approximately every 24 months. Heavy engine maintenance is performed approximately
every four to six years and includes a more complex scope of work. Due to our relatively small fleet size and projected fleet
growth, we believe outsourcing all of our heavy maintenance activity, such as engine servicing, major part repair and
component service repairs is more economical. Outsourcing eliminates the substantial initial capital requirements inherent in
heavy aircraft maintenance. We have entered into a long-term flight hour agreement for our current fleet and future deliveries
with IAE and Pratt & Whitney for our engine overhaul services and Lufthansa Technik on an hour-by-hour basis for component
services. We outsource our heavy airframe maintenance to FAA-qualified maintenance providers.
Our recent maintenance expenses have been lower than what we expect to incur in the future because of the relatively
young age of our aircraft fleet. Our maintenance costs are expected to increase as the scope of repairs increases with the
increasing age of our fleet. As our aircraft age, scheduled scope of work and frequency of unscheduled maintenance events is
likely to increase like any maturing fleet. Our aircraft utilization rate could decrease with the increase in aircraft maintenance.
Employees
Our business is labor intensive, with labor costs representing approximately 19.9%, 19.1% and 19.1% of our total
operating costs for 2014, 2013 and 2012, respectively. As of December 31, 2014, we had 1,035 pilots, 1,490 flight attendants,
26 flight dispatchers, 396 mechanics, 883 airport agents/other and 389 employees in administrative roles for a total of 4,219
employees. As of December 31, 2014, approximately 67% of our employees were represented by four labor unions. On an
average full-time equivalent basis, for the full year 2014, we had 3,722 employees, compared to 3,224 in 2013.
FAA regulations require pilots to have commercial licenses with specific ratings for the aircraft to be flown and be
medically certified as physically fit to fly. FAA and medical certifications are subject to periodic renewal requirements,
including recurrent training and recent flying experience. Mechanics, quality-control inspectors and flight dispatchers must be
certificated and qualified for specific aircraft. Flight attendants must have initial and periodic competency training and
qualification. Training programs are subject to approval and monitoring by the FAA. Management personnel directly involved
in the supervision of flight operations, training, maintenance and aircraft inspection must also meet experience standards