Basic Math Is on Spirit Airlines' Side
Five cents may not be a lot of money, but when multiplied by the billions of available seat miles major airlines count as capacity in any given quarter, it starts to add up to some pretty significant dollars.
A differential in unit costs is one of the key advantages ultra-low-cost carrier (ULCC) Spirit Airlines (NASDAQ: SAVE) holds over competitor United Airlines (NYSE: UAL), the legacy airline that has challenged Spirit to a wage battle in 2017. In the third quarter of this year, Spirit reported costs per available seat mile, or CASM, of 7.59 cents, against United's third-quarter CASM of 12.54 cents.
Image source: Spirit Airlines.
Source: Fool.com