Spirit 2Q Profits rise sharply.

[NAAPilot]

Just read in ATW that Spirit profits were 5 times what they were same quarter last year. Profits were 17.6million, up 5 fold from 3.1 the previous year. Congrats guys! No reason why the company can't finally pay and treat you what you're worth.

 

[castle bravo]

If this is really the case, then why the furloughs????

 

[troll565]

If this is really the case, then why the furloughs????

Because we returned 7 planes

 

[Mike man]

So far it is only 2 airplanes...and they were not returned, they were transferred to Tiger Airways which our inverters are invested in too...and give preferential interviews to our out of work folks.

 

[troll565]

So far it is only 2 airplanes...and they were not returned, they were transferred to Tiger Airways which our inverters are invested in too...and give preferential interviews to our out of work folks.

It's 5 so far. I flew one personally to MIA and there were 2 more already sitting there. One was getting painted with Mandala colors.

 

[gatorbird]

So far it is only 2 airplanes...and they were not returned, they were transferred to Tiger Airways which our inverters are invested in too...and give preferential interviews to our out of work folks.

7 were off the flowsheet yesterday. Hard to say if they're all gone-- hopefully a few are getting C checks/new seats/etc. Unfortunately, a few have already popped up on the internet painted in Mandala Airlines colors.

I personally don't buy the profit margin numbers. I'm confident the place made a little money, but not at the rate the books said we did. Everyone should remember that the same white-collar crooks who are blatantly violating our contract are the ones who submitted these numbers.

gator

vols suck

 

[troll565]

Spirit put the money (~$30M) we got from selling our fuel hedge contracts and applied it to our fuel expense for that quarter, making it seem like we spent that much less than we actually did.



We still lost money, (on the) bottom line.

 

[Beetle007]

Good point. But, I don't think Spirit's 2nd quarter numbers reflect us selling our fuel hedges. They are unrealized gains from our fuel hedges going up in value during the 2nd quarter.

For example, Southwest was forced to account for the unrealized gains when their fuel hedges went up. Now Southwest will have to account for the unrealized losses when the fuel hedges drop. Realized gains/losses don't occur until the fuel hedge is sold or expires.

I disagree with the fact that the government seemingly allows airlines to use "fuel hedges" to adjust fuel cost numbers. In my opinion fuel hedges are a non-operating revenue/loss, and they do not change the cost of fuel. Remember that airlines are buying heating oil or crude oil. You can't hedge jet fuel in the United States!

So what if an airline decided to buy corn futures (or any other commodity) because they realized there is a close correlation to jet fuel prices. Could they pretend like this some how changes the price they pay at the pump for jet fuel? Jet engines will run about as well on corn oil as heating or crude oil (sarcasm).

 

[huncowboy]

Spirit put the money (~$30M) we got from selling our fuel hedge contracts and applied it to our fuel expense for that quarter, making it seem like we spent that much less than we actually did.



We still lost money, (on the) bottom line.

Even if that is the case. That $30 has been an expense at the time they have bought it. It has been reported as a loss somewhere prior to this Q. So NK might have not had the $28 mil profit now, but it also did not have the X amount of loss wherever before when they bought the option. Just a thought.

 

[Beetle007]

A fuel hedge is considered an "investement" not an expense. So when we bought the fuel hedges...it had no affect on the profit/loss for that quarter.

 

[kwick]

Why is it that when SW profits from their hedges it's a good thing, but it's a bad thing for Spirit?

Just be glad that it's a profit, and not a loss, as most other airlines are reporting.

 

[huncowboy]

A fuel hedge is considered an "investement" not an expense. So when we bought the fuel hedges...it had no affect on the profit/loss for that quarter.

So how about when you sell it?

 

[Beetle007]

From looking at the bts.gov website, it appears as though it is treated as a loss or profit regardless of it has been sold. All that matters is its value.

If I buy 1 million worth of fuel hedges and sell it for 1.3 million, then it is posted as a realized profit of 0.3 million at the end of the quarter.

If I buy 1 million worth of fuel hedges and the value goes up to 1.3 million, then it is posted as an unrealized profit of 0.3 million at the end of the quarter.

I could be wrong...but this is my understanding. And, the opposite would occur for fuel hedges that are a loss.

 

[troll565]

Why is it that when SW profits from their hedges it's a good thing, but it's a bad thing for Spirit?

Just be glad that it's a profit, and not a loss, as most other airlines are reporting.

The point is, if we didn't sell our fuel hedges (which we did to pay bills, from what I was told by a corporate worker), we would have lost a ton of money.


Just ask the crew that taxied into MCO and when the ground guys saw us, walked away cause we hadn't paid them.

 

[kwick]

The same could be said about SW. They made 3.5 Billion from hedges in last ten years.

How much do you think they would be ahead without that?

 

[Beetle007]

The same could be said about SW. They made 3.5 Billion from hedges in last ten years.

How much do you think they would be ahead without that?

I read an article where Garry Kelly (CEO of SWA) was asked why he doesn't give some of the fuel hedge money back to the investors in the form of a dividend. His answer was that it would be put SWA into bankruptcy.

So, do you think the investors at Spirit will pocket the fuel hedge money and put us into bankruptcy? or, will they "reinvest" the fuel hedge money back into the airline?

 

[gatorbird]

I read an article where Garry Kelly (CEO of SWA) was asked why he doesn't give some of the fuel hedge money back to the investors in the form of a dividend. His answer was that it would be put SWA into bankruptcy.

So, do you think the investors at Spirit will pocket the fuel hedge money and put us into bankruptcy? or, will they "reinvest" the fuel hedge money back into the airline?

Don't mention this investor team in the same breath as Kelly & Co. at SWA. That bunch is interested in running a successful airline; our investors are interested in profit only...the means to that profit is of no concern to them. Two different ways of thinking entirely.

gator

 

[troll565]

Recalling 25 on 12/1

 

[Mike man]

I really don't think the recall is something to get that excited about...yes people are coming back=good

I'm sure it is to only replace attrition.