Air Transport World

Spirit[ed] bottom feeder.(Company Profile)

Detroit-based Spirit Airlines makes a hearty meal out of low-fare traffic

There is a truism in the U.S. that no airline can remain healthy on a diet consisting solely of leisure traffic: Lots of calories but no nutrition. Don't try to tell that to the people at Spirit Airlines.

The small Detroit-based carrier has been thriving on low-yield vacation traffic since beginning scheduled operations in 1992 and has only had two unprofitable quarters over the past 10 years, according to Ned Homfeld, founder, president, CEO and majority owner of the privately held carrier. Although Spirit does not report financial results publicly, data filed with the U.S. Department of Transportation reveal that the carrier earned $5.2 million on revenues of $91 million over the first three quarters of 1998, representing a respectable 5.7% net profit margin for the nine-month period.

Spirit's origins actually date back to 1980, when Homfeld started a tour operation in his Detroit hometown selling charters to day-tripping gamblers eager to roll the dice in Atlantic City. Over the years, Charter One added other gambling destinations such as Las Vegas and the Bahamas. It got its own FAA certificate in 1990 and operated a couple of Convair 580s for a time.

The airline got its big break when the first Midway Airlines went belly-up in 1992 and Homfeld was able to pick up four DC-9s at rock-bottom prices owing to the collapse of the market for secondhand aircraft. He began serving some Florida destinations from Atlantic City and Detroit. …

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