Spirit Airlines, Inc. (NYSE:SAVE) Q4 2022 Earnings Call Transcript

Mike Linenberg: Okay. Great. Thanks, everyone.

Operator: And we will take our next question from Jamie Baker with JPMorgan. Your line is open.

Jamie Baker: Hey, good morning, everybody. Quick one on pilots. As I recall, the contract had richer increases for first officers than for captains, which kind of seems sensible given the industry challenges right now. I know it’s very early, but have you seen any changes yet in the cadence of applications? And is the tempered 2023 growth rate have any specific assumptions in this regard, like an uptick in applicants? Or is the tempered growth solely a function of the aircraft issues that you spoke about?

Ted Christie: Good morning, Jamie. So as to the first question, it is too early to call it one way or the other. I mean, our pilots ratified this contract less than a month ago. So I think initial signs are positive, however, both as it relates to attrition and our continued throughput on new hires. So we feel like that will produce the kind of results we see. To the second question, the more muted growth rate has almost entirely everything to do with the fleet moves that Scott and both the neo issue, the Airbus delivery delays. Admittedly, the 319 retirement was different than our planned assumption, but that was going to happen eventually. So I think it’s more of that. I think we have adequate staffing and throughput to staff a bigger airline, which is why I said in my comments that if we start to feel more comfortable that ATC problems are getting resolved quicker, that we’re not seeing as much as many issues with catering trucks and fueling trucks and stuff like that, we could probably tick the growth up a little bit more, but we will wait to see that first.

Jamie Baker: Got it. And second question, just because it’s generated some headlines, and I’m getting questions here. The estimate or your comment that you expect to hear from the DOJ in the next 30 days, is that a well-informed estimate on your part or something that specifically justice has guided you to?

Ted Christie: Not to guess on my part, just based on where we’ve seen the process goes. So I wouldn’t or so. I said or so because I mean it could be longer than that. But we’re into the process right now and have been working with the DOJ on making sure we satisfy the request and that sort of thing. So as we’ve laid out, I guess, JetBlue has been more specific in laying out the process. I think it’s consistent with their view on where things will go and still in line with what the timing estimates were that were given early on.

Jamie Baker: Okay. That’s really helpful. Look forward to seeing you next month at our conference. Take care.

Ted Christie: Thanks.

Operator: We will take our next question from Duane Pfennigwerth with Evercore ISI. Your line is open.

Duane Pfennigwerth: Hey, good morning.

Ted Christie: Hey, Duane, okay?

Duane Pfennigwerth: Yes. I am good. Thanks for the time. You talked about time on wing, lower time on wing, that is a phrase you used at least 2 or 3x on the call. Can you speak a little bit more specifically what was the expectation in your planning in terms of cycles or years? And what is it that you’re realizing and who bears the higher cost there?