Spirit falls short in bid for rights at DC airport
Spirit Airlines Inc. bid for some of American Airlines' takeoff and landing rights at Washington's Reagan National Airport but lost out to Virgin America.
CEO Ben Baldanza disclosed Spirit's failed bid Wednesday while discussing fourth-quarter financial results, which beat analysts' forecasts and sent the stock higher.
The shares rose $2.93, or 6.1 percent, to close at $50.59.
Spirit is small but growing rapidly. It promotes low fares while charging passengers for all kinds of extras including use of the overhead bins. The strategy seems to be working.
Miramar, Fla.-based Spirit reported that fourth-quarter net income more than doubled from a year ago, to $43.2 million. Excluding fuel-hedging and other items, it would've earned 56 cents per share, beating the forecast of 50 cents from analysts surveyed by FactSet.
Revenue soared 28 percent to $420 million, matching analysts' expectations.
Spirit has been adding new routes and saw a chance to expand to Reagan National when American agreed to sell some of its takeoff and landing slots as part of a deal to settle a government lawsuit against its merger with US Airways. But Spirit's bid wasn't high enough, the CEO said.
"We're OK with that because we wouldn't want to overpay," Baldanza said.
Southwest Airlines and JetBlue Airways bid successfully for some of the slots, and Virgin America announced late Wednesday that it also gained slots. Southwest and Virgin also gained slots that American is giving up at New York's LaGuardia Airport.
Spirit is still interested in gates that American agreed to give up at airports in Chicago, Los Angeles and Boston, Baldanza said.