SAVE Company Profile

Our ultra low-cost carrier, or ULCC, business model allows us to compete principally by offering customers our Bare Fares TM, which are unbundled base fares that remove components traditionally included. We then give customers Frill Control TM, which provides customers the freedom to save by paying only for the options they choose such as bags, advance seat assignments and refreshments.

Our ULCC business model provides customers very low, unbundled base fares with a range of optional services, allowing customers the freedom to choose only the options they value. The success of our model is driven by our low cost structure, which permits us to offer very low base fares while maintaining one of the highest profit margins in the industry.
We are focused on price-sensitive travelers who pay for their own travel, and our business model is designed to deliver what we believe our customers want: low fares. We aggressively use low fares to stimulate air travel demand in order to increase passenger volume, load factors and non-ticket revenue on the flights we operate. Higher passenger volumes and load factors help us sell more ancillary products and services, which in turn allows us to reduce the base fare we offer even further, stimulating additional demand. We strive to be recognized by our customers and potential customers as the low-fare leader in the markets we serve.

We compete based on total price. We believe other airlines have used an all-inclusive price concept to effectively raise total prices to consumers, rather than lowering fares by unbundling each product or service. For example, carriers that tout “free bags” have included the cost of checking bags in the total ticket price, which does not allow passengers to see how much they would save if they did not check luggage. We believe that we and our customers benefit when we allow our customers to know the total price of their travel by breaking out the cost of optional products or services. Customers booking through our website are easily able to compare the total cost of flying with us versus flying with another airline.
We allow our customers to see all available options and their respective prices prior to purchasing a ticket, and this full transparency illustrates that our total price, including options selected, is lower than other airlines on average.

Ultra-Low Cost Structure. Our unit operating costs are among the lowest of all airlines operating in the Americas. We believe this cost advantage helps protect our market position and enables us to offer some of the lowest base fares in our markets, sustain among the highest operating margins in our industry and support continued growth. Our operating costs per available seat mile (CASM) of 9.65 cents in 2014, were significantly lower than those of the major domestic network carriers and among the lowest of the domestic low-cost carriers. We achieve these low unit operating costs in large part due to:

high aircraft utilization;

high-density seating configurations on our aircraft, which is part of our Plane Simple TM strategy with its dense seating configurations and simplified onboard product designed to lower costs;

no hub-and-spoke inefficiencies;

highly productive workforce;

opportunistic outsourcing of operating functions;

operating our Fit Fleet TM, a modern single fleet type of Airbus A320-family aircraft with common flight crews across it;

reduced sales, marketing and distribution costs through direct-to-consumer marketing;

efficient flight scheduling, including minimal ground times between flights; and

a company-wide business culture that is keenly focused on driving costs lower.
Innovative Revenue Generation. We execute our innovative, unbundled pricing strategy to produce significant non-ticket revenue generation, which allows us to stimulate passenger demand for our product by lowering base fares and enabling passengers to identify, select and pay for the products and services they want to use. Our unbundled strategy has enabled us to grow average non-ticket revenue per passenger flight segment from approximately $5 in 2006 to $55 in 2014 by:

charging for checked and carry-on baggage;

passing through all distribution-related expenses;

charging for premium seats and advance seat selection;

enforcing ticketing policies, including service charges for changes and cancellations;

generating subscription revenue from our $9 Fare Club ultra low-fare subscription service;

deriving brand-based revenues from proprietary services, such as our FREE SPIRIT affinity credit card program;

offering third-party travel products (travel packages), such as hotel rooms, ground transportation (rental and hotel shuttle products) and attractions (show or theme park tickets) packaged with air travel;

selling third-party travel insurance through our website; and

selling in-flight products and onboard advertising