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Revises Growth, Cuts Non-Fuel Costs, Reduces Employees, Increases Non-Ticket Revenue

Spirit Airlines attacks record fuel prices

eTN  Jul 03, 2008

MIRAMAR, Florida - Spirit Airlines attacks record high fuel prices by revising 2008 growth, cutting 15% of non-fuel costs, continuing to increase non-ticket revenue and continuing to expand to the Caribbean and Latin America.

Spirit is targeting a 15% reduction in non-fuel expenses ensuring Spirit's costs remain the lowest in the Americas. Spirit is carefully evaluating every expense and is working with all stakeholders to ensure necessary objectives are met.

Spirit remains focused on growing revenue through non-ticket revenue products and services that add value rather than substantially raising fares, which stalls customer demand.

Spirit entered Colombia in May with the addition of Cartagena. Flights to Trinidad began in June. Bogota will begin July 24, 2008. Additionally, Spirit today filed an application with the US Department of Transportation to serve Manaus, Brazil. Other growth opportunities are being evaluated in the broader Caribbean and Latin America region for 2009.

Spirit has revised its 2008 growth plan, which originally called for 10 percent growth year-over-year, and now expects flat capacity year-over-year.

"We can't sit back and hope for fuel prices to fall. We will attack this challenge by adapting our business to the structural change in fuel prices," said Spirit CEO Ben Baldanza. "We are in a better position than any other carrier in the Americas to succeed in this environment. By becoming more aggressive than ever on non-fuel costs, raising non-ticket revenues and continuing to grow our Latin America network while trimming lower performing flights, we will win."

As part of its revised 2008 growth plan, beginning August 1, 2008, service to Long Island MacArthur and Providenciales, Turks & Caicos Islands will be suspended. Spirit will return to MacArthur when market conditions change. In Providenciales, excessive local costs have made air service not economically viable.

Starting September 2, 2008, service to Grand Cayman, Cayman Islands and Punta Cana, Dominican Republic, will be operated on a seasonal basis to better match capacity with demand.

Additional adjustments will be made to select markets during off-peak periods, and Spirit will retire five Airbus A319 aircraft by September. In addition, the airlines will make reductions in employees to coincide with these capacity adjustments. Spirit expects to maintain its low cost carrier leadership position in Fort Lauderdale, the Caribbean, Latin America, Michigan, New Jersey and other key markets.

These refinements result in limited changes to Spirit's overall scope of service with no impact to over 300 markets served non-stop and through the Fort Lauderdale gateway.

Spirit Airlines attacks record fuel prices

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