Ultra low-cost carrier (ULCC) Spirit Airlines reported a first-quarter net profit of $31.9 million, down 48.4% from net income of $61.9 million in the prior-year period, but the Fort Lauderdale-based airline believes it is on the upswing.

The aggressive price matching of major US airlines has led the airline to focus more on improving operating performance and on managing its fares more thoughtfully, CEO Bob Fornaro told analysts. “We still have very low fares, but it’s no longer load factor at all cost,” he said. “We are getting better at managing our capacity … [With] the pricing environment today, which is a lot of price matching, you have to be more nimble with the way you manage your schedules, and I think you’re going to see a lot more of that going forward.”

Fornaro noted that Spirit’s on-time performance improved 10.2 percentage points year-over-year (YOY) to 75.5% in the first quarter. “While we still have a ways to go to reach our desired operational goals, this was a significant improvement,” he said.

Spirit’s first-quarter revenue rose 10% YOY to $591.7 million while expenses jumped 21.9% to $532.3 million, including a 62.6% leap in fuel costs to $139.8 million and a 9.2% increase in labor costs to $127.1 million. Operating profit was $59.4 million, down 41.4% from operating income of $101.3 million in the prior-year period.

Spirit’s first-quarter traffic rose 10.7% to 5.6 billion RPMs on a 14.9% increase in capacity to 6.9 billion ASMs, producing a load factor of 81.6%, down 3.1 points. Yield decreased 0.7% to 10.5 cents.

Aaron Karp aaron.karp@penton.com