Spirit Airlines May Traffic Rises 24.8%, Capacity Up 24%

Miramar, FL-based low-cost carrier Spirit Airlines (NASDAQ:SAVE) posted a significant rise in air traffic for the month of May this year. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.93 billion, up 24.8% from 1.55 billion recorded in May 2015.

On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 24% to 2.21 billion. Moreover, the load factor or percentage of seats filled by passengers increased to 87.2% from 86.6% recorded last May. Load factor increased as traffic growth outpaced capacity expansion for the month. The discount carrier registered a completion factor (system wide) of 98.6% for the month.

For the first five months of 2016, Spirit Airlines generated RPMs of 8.74 billion (up 25% year over year) and ASMs of 10.28 billion (up 25.1% year over year). Meanwhile, load factor fell by 10 basis points to 85% with capacity expansion outweighing traffic growth in the period.

Apart from posting impressive traffic numbers, the carrier has been receiving positive news on the labor front as well. Recently, the carrier inked a pay-related tentative contract with the International Association of Machinists & Aerospace Workers. The provisional deal covers the members of the ramp service team of the carrier based at Fort Lauderdale-Hollywood International Airport. The ratification voting procedure will be carried out later in the month. Moreover, in May, flight attendants of the company ratified a pay-related five-year deal.

The spate of positive developments can well be attributed to the change in helm at Spirit Airlines at the beginning of 2016. In January, Robert Fornaro was appointed as president and Chief Executive Officer, replacing Ben Baldanza. The change has undoubtedly boosted the stock, which has gained over 14% this year.

Zacks Rank & Stocks to Consider

Spirit Airlines currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include SkyWest, Inc. (NASDAQ:SKYW) , Air France-KLM SA (OTC:AFLYY) and GOL Linhas (NYSE:GOL) . While SkyWest and Air France sport a Zacks Rank #1 (Strong Buy), GOL Linhas carries a Zacks Rank #2 (Buy).