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Spirit Airlines (SAVE) Rallies 9% in October: Here's Why


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Shares of Spirit Airlines, Inc.SAVE have fared well in the month of October. The stock has gained 9.2%, against the industry 's decline of 9.3%.

Price Performance in October

Reasons for Impressive Price Performance

The Miramar, FL-based airline company recently reported impressive figures in third-quarter 2018 results. Earnings per share (EPS) came in at $1.47, which beat the Zacks Consensus Estimate of $1.39. Moreover, the bottom line surged 56.4% year over year. Revenues of $904.3 million marginally outpaced the consensus mark of $904.1 million.  Also, the top line improved 31.6% year over year owing to 24.6% and 3% rise in passenger segments and operating yields, respectively. A sound operating environment, strategic network re-orientation as well as better-than-expected results from improved yield management processes boosted performance.

Moreover, Spirit Airlines has promoted Scott M. Haralson to the position of Senior Vice President and Chief Financial Officer (CFO). Haralson  has assumed his new responsibilities from October 16, 2018. The move is likely to enhance the company's performance, courtesy of Haralson's 18 years of experience in the airline space.

Furthermore, as part of its expansion efforts, the company started offering international service from Orlando International Airport (MCO) by launching new routes in the month of October. The new routes are aimed at offering improved access to the Orlando region.  Additionally, the carrier also planned to generate additional jobs in Orlando by creating a crew base for Flight Attendants and Pilots.

Escalating Fuel Costs: A Major Tailwind

Despite reporting impressive earnings results, rising fuel costs are limiting Spirit Airlines' bottom-line growth. Average economic fuel cost per gallon rallied 34.9% year over year to $2.36 in the third quarter. Fuel costs are expected to increase further to $2.46 per gallon, in the fourth quarter, up from $1.97 reported in the fourth quarter of 2017.

Spirit Airlines is not the sole airline operator to be hurt by rising fuel costs. Fellow airline companies like Southwest Airlines Co. LUV , GOL Linhas Aereas Inteligentes S.A. GOL and Delta Air Lines, Inc. DAL are also suffering from escalating fuel costs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: SAVE , GOL , DAL , LUV



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