Florida-based ultra-low-cost carrier Spirit Airlines reported 2016 net profit of $264.9 million, down 16.5% from net income of $317.2 million in 2015.

Excluding full-year special charges of $37.2 million related to aircraft lease termination costs, Spirit’s 2106 net income totaled $291 million, down 8% from 2015.
Spirit’s 2016 revenue was up 8.4% to $2.3 billion; expenses increased 15.1% to $1.9 billion, producing operating income of $443.7 million, down 12.9% year-over-year.
The airline’s 2016 traffic rose 19.9% to 21.6 billion RPMs on a 20% increase in capacity to 25.5 billion ASMs, producing a load factor of 84.7%, which remained flat compared to 2015. Yield fell 9.6% to 10.76 cents as the LCC continues to face competitive pricing pressure from the major US airlines.
“The competitive environment has changed dramatically. Prior to the summer of 2015, for the most part, the competition didn’t match many of Spirit’s prices. Certain markets outside of foreign have always been competitive but in a lot of mid-continent markets our pricing was ignored; we were viewed as a small carrier and with all the restructuring going on, we were ignored in many of those markets,” Spirit president and CEO Bob Fornaro said during the Feb. 7 call with analysts. “That’s changed and basically today we see heavy competition across our whole network.”

Spirit added 16 Airbus aircraft to its fleet in 2016, including three A320ceos, five A320neos and eight A321ceos, ending the year with 95 aircraft. The airline expects to receive 11 A321s in 2017. Additionally, the airline opened up new markets in Seattle, Washington; Akron-Canton, Ohio; Newark, New Jersey; and Havana, Cuba. Service to Hartford, Connecticut, will open up in April. The airline has already announced plans to launch 17 new routes in 2017, and will announce 10-15 more by the end of the year.