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Hot Fares! Sexy Destinations! Sweet, New Planes!

Hot Fares! Sexy Destinations! Sweet, New Planes!. Outline. Low Cost Leader Fleet Transition Caribbean and Latin American Focus Fort Lauderdale Hub Santo Domingo Case Study Summary. Low Cost Leader. It’s easy to be a low fare carrier but tough to be a low cost carrier

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Hot Fares! Sexy Destinations! Sweet, New Planes!

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  1. Hot Fares! Sexy Destinations! Sweet, New Planes!

  2. Outline • Low Cost Leader • Fleet Transition • Caribbean and Latin American Focus • Fort Lauderdale Hub • Santo Domingo Case Study • Summary

  3. Low Cost Leader • It’s easy to be a low fare carrier but tough to be a low cost carrier • We intend to be the least cost carrier to ensure that we can survive through these tumultuous times and thrive during the good times

  4. Low Cost Leader • How do we keep our costs low? • Technology • In-house reservations system • 70%+ reservations booked direct • Carefully managed 3rd party selling • Multiple language capable spiritair.com • Fuel hedges • Hedged through ‘05 • 70% of needs hedged through April ‘06

  5. Low Cost Leader • How do we keep our costs low? • Efficiencies with all employee groups working together for unified goals • Rational aircraft utilization vs irrational utilization at below-variable cost revenue potential • Onboard snack sales to offset complimentary service costs

  6. Fleet Transition • Spirit placed a firm order for 38 Airbus aircraft with options for another 47 planes • Fleet count currently: • A319 - 10 • A321 - 6 • MD-80 - 17

  7. Fleet Transition • 15 new Airbus airplanes to be delivered in ‘06 • Complete MD-80 transition by early ‘07 but exploring options to retire MD-80 fleet during ‘06

  8. Fleet Transition • Fuel savings • Average of 30% savings in fuel alone when flying an A319 vs an MD-80 • Planes designed with customer comfort in mind • Leather seats and moveable headrests • Oversized bins • Extra 6 inches of space in business class

  9. Caribbean & Latin American Focus • Why focus on the Caribbean and Latin America? • Geography: Spirit’s FLL hub is an excellent location for a low cost/low fare Caribbean/Latin American hub. • Logical “pivot” point from Northern domestic markets • Large local ethnic market which naturally serves this region and will build on the expected growth

  10. Broward County Hispanic Country of Origin Source U.S. Census 2000

  11. Caribbean & Latin American Focus • Opening eight new destinations between January ‘05 and February ‘06 • Nassau, Bahamas (January ‘05) • Kingston, Jamaica (November ‘05) • Montego Bay, Jamaica (November ‘05) • Punta Cana, Dominican Republic (December ‘05) • St. Thomas, USVI (December ‘05) • Grand Cayman, Cayman Islands (February ‘06) • Providenciales, Turks & Caicos (February ‘06) • Grand Turk, Turks & Caicos (February ‘06)

  12. Caribbean & Latin American Focus • Adding four new markets to support the Caribbean expansion as well as non-stop service to the Fort Lauderdale hub • Orlando (November ‘05) • Tampa (December ‘05) • Dallas/Fort Worth (January ‘06) • Atlanta (February ‘06)

  13. Caribbean & Latin American Focus • Latin American Infrastructure • 1st fully functional Spanish-language website - November ‘01 • Spanish speaking reservations line • Spanish speaking flight attendants • Upper management region expertise

  14. Caribbean & Latin American Focus • Why will the Latin American routes succeed? • Spirit’s rate of growth will mirror the rate of ethnic growth in South Florida • With a hub in Fort Lauderdale, Spirit is best positioned to carry local and connecting traffic • This winter, Spirit is forecasted to have 3.8% of available seats to the Caribbean which equates to being the 5th largest carrier into the region

  15. Fort Lauderdale Hub • As of February, the new routes will bring the total destinations served from the FLL hub to 22 non-stops • 10 points to the North/West and 12 points to the South/East allow for 120 unique Bahamas, Caribbean & Latin America connections • In total, we are now selling 104 city pairs as part of the new Fort Lauderdale hub alone

  16. The number of city pairs has grown dramatically as our hubs have grown.

  17. The Spirit Effect - FLL-SDQ • Spirit started service between Fort Lauderdale and Santo Domingo in November 2004 • The impact on FLL-SDQ traffic was immediate • Passengers were up 300% by 4Q ‘04 • Average fare fell 9% by 4Q ‘04 • Including Miami service, the South Florida-Santo Domingo traffic increased 31% year over year in the 4th quarter 2004 • Spirit has successfully grown the market to the benefit of passengers, other airlines, and the local economy in Santo Domingo

  18. Summary • Spirit has hot fares! • By keeping our costs low, we can keep our fares low and never gouge our customers. • Spirit flies to sexy places! • 12 destinations in the Bahamas and the Caribbean with sights on Latin America • Spirit has sweet, new airplanes! • New Airbus fleet with all leather seats and an extra 6 inches of legroom in business class

  19. Summary • Spirit has the Latin American infrastructure in place to grow and succeed in the region as evidenced by the success in Santo Domingo • Spirit is Caribbean Chic! • Spirit is the leading low cost carrier to the Caribbean and well positioned for the future with Fort Lauderdale as the largest low fare connecting hub in Florida

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