Spirit Airlines 2Q profit down on competition pressure

Spirit Airlines reported 2016 Q2 net income of $73.1m, down 4.7% from a $76.7m profit in the year-ago period. The airline said that continued competitive pressure made the end of Q2 challenging. Revenue for Q2 rose 5.5% to $584.1m while expenses increased 7.2% to $462m, producing an operating profit of $121.8m, almost flat from an operating profit of $122m in the prior-year quarter. During peak demand travel, the airline said its fares were too low. “During the quarter, we pushed through several fare increases. This was a first for Spirit,” CEO Bob Fornaro said. “Unfortunately, the benefit of these increases was largely diluted by aggressive competitive pricing actions during that period. However, thanks to our ultra low-cost structure, we were still able to deliver solid profits and among the highest in the industry,” he said. “While our bottom line results were in line with expectations, we are disappointed with the yield performance … despite our efforts, yields were and continue to be pressured by more fare discounting by our competitors than what is typical for a peak summer travel period. International … underperformed our system average. While the beach destinations are fine, many of the VFR (visiting friends and relatives) markets continue to be negatively impacted by macroeconomic conditions in the region,” Spirit CFO Ted Christie said. Revenue per passenger segment for the quarter declined approximately 15% year-over-year, he added.<br/>