Spirit Airlines today reported its preliminary traffic results for September 2014. Traffic (revenue passenger miles) in September 2014 increased 13.5 percent versus September 2013 on a capacity (available seat miles) increase of 18.0 percent. Load factor for September 2014 was 81.5 percent, a decrease of 3.2 pts compared to September 2013. Spirit's preliminary completion factor for September 2014 was 99.1 percent, down 0.4 percentage points year-over-year due to service disruptions caused by the Air Traffic Control facility fire in Chicago and Hurricane Odile which damaged the airport in Los Cabos, Mexico resulting in a temporary suspension of all flights to/from Los Cabos.
The Company recently became aware of an underpayment of Federal Excise Tax ("FET") on a minority portion of its fuel purchases for the time period beginning July 1, 2009, coinciding with a change in fuel service provider, through August 30, 2014. In its calculation for economic fuel price for the third quarter 2014, the Company will exclude the prior years' additional FET amount of $9.3 million but will include the year-to-date 2014 additional FET amount of $2.1 million. The Company estimates its economic fuel price per gallon for the third quarter of 2014, which includes the year-to-date 2014 additional FET amount, will be $3.13.
Based on actual results for July and August and estimated results for September, including the year-to-date 2014 FET amount noted above, the Company believes its third quarter adjusted operating margin will be in the lower half of its previous guidance range. The Company plans to provide an investor update on October 15, 2014 which will include more detailed guidance for the third quarter 2014.
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