Spirit Airlines files to go public

By Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- Spirit Airlines Inc. is going public.

The airline, based in Ft. Lauderdale, Fla., has filed with the Securities and Exchange Commission for an initial public offering.

The S-1 filing does not specify the number of shares it plans to sell or assign them a value, but it did say that it plans to use the proceeds to pay off some $264 million in debt.

"The IPO will strengthen their position and, if completed, will demonstrate to the market and the industry that they are a serious airline," said Ray Neidl, airline analyst with the Maxim Group. "To their credit, they weathered the past 2 years -- which were extremely challenging due first to runaway fuel prices, and then to the challenging economy."

The company has several underwriters, including Citi (C, Fortune 500), JPMorgan Stanley (JPM, Fortune 500), Barclays Capital (BCS) and Dahlman Rose & Co. The airline, led by Chief Executive Officer Ben Baldanza, said that its revenue for 2009 totaled $700 million.

Spirit describes itself as "an ultra low-cost, low-fare airline" that provides flights between South Florida and the Caribbean and Latin America. The airline said that its average base fare was $83 during the first six months of 2010, "and we regularly offer promotional base fares of $9 or less."

The airline said it has reduced base fares by 40% since 2007, "with the goal of stimulating additional passenger demand," while adding additional fees for baggage and seat selection services.

This practice has become common in the airline industry over the last couple years, as airlines struggled with the recession and volatile fuel prices. Most airlines began charging additional fees for services that once came for free, such as checked luggage, non-alcoholic drinks and food.

And Spirit made it crystal clear in its filing that these new fees are not going away, but it also said that it intends to continuing lowering air fares.

Harlan Pratt, a finance professor who covers the airline industry at Northeastern University's College of Business Administration in Boston, referred to Spirit as "the American Ryanair " -- a reference to the low-cost Irish airline that relies heavily on fees. He said this distinction could give Spirit a competitive edge.

"We're going to see an upward escalation in airfares, and that gives Spirit the opportunity to become the carrier that's known for cheap air fares," he said. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 12:51am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Sponsors

Sections

Spencer has been a supporting member of the "Good Morning America" cast for the past three years. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.