Following the resolution last week of a new labor contract with its pilots, Fort Lauderdale-based ultra-LCC Spirit Airlines raised its expected operating expenses excluding fuel for the 2018 first quarter and full-year 2018 by approximately three percentage points compared to 2017.

In an updated guidance statement, Spirit forecast its adjusted CASM ex-fuel for first-quarter 2018 will decline about 3% year-over-year (YOY), narrowing from the 5.5% to 6.5% decline Spirit forecast a month earlier. Similarly, Spirit forecast the company’s full-year 2018 CASM ex-fuel would fall somewhere between flat and -1% YOY, contrasted with a 3%-5% drop the ULCC forecast on Feb. 6.

Spirit’s pilots, as represented by the Air Line Pilots Association (ALPA), ratified on Feb. 28 a new five-year labor contract, ending a contentious three-year series of negotiations between Spirit’s 1,600 pilots and management. The contract included an immediate 43% pay increase effective on the date of signing, along with increased contributions to pilots’ retirement plans and $75 million in ratification compensation.

Spirit did not adjust its revenue forecast; the company is still expecting 1Q2018 TRASM to fall between 1% and 2.5%. Spirit’s forecast capital expenditures for full-year 2018 also remained unchanged at an expected $649 million, including $354 million in aircraft capital commitments relating to 10 aircraft delivered, or scheduled to be delivered, in 2018.

According to its fleet plan, Spirit is scheduled to take delivery of five Airbus A321ceos and one A320ceo in the 2018 first quarter, followed by an additional four A320ceos by the end of the year, bringing Spirit’s fleet to a total of 122 all-Airbus aircraft by year-end 2018. Spirit has an additional 43 A320neos on order, with deliveries expected between 3Q2019 through 2021.

Mark Nensel