UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35186

SPIRIT AIRLINES, INC.

(Exact name of registrant as specified in its charter)


Delaware			38-1747023
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

2800 Executive Way	Miramar	Florida	33025
(Address of principal executive offices)			(Zip Code)

(954) 447-7920

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of exchange on which registered

Trading Symbol

Common Stock, $0.0001 par value

New York Stock Exchange

SAVE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
(Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange ~~Act..~~Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the close of business on ~~August 2,~~October 20, 2022:


Class						Number of Shares
Common Stock, $0.0001 par value						~~108,851,093~~108,857,162

Table of Contents

INDEX

Page No.

Part I. Financial Information

Item 1.

Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Statements of Operations - Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Condensed Consolidated Statements of Comprehensive Income (Loss) - Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Condensed Consolidated Balance Sheets – ~~June~~September 30, 2022 and December 31, 2021

Condensed Consolidated Statements of Cash Flows – ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Condensed Consolidated Statements of Shareholders' Equity - Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Glossary of Airline Terms

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II. Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

4645

Item 3.

Defaults Upon Senior Securities

4645

Item 4.

Mine Safety Disclosures

PART I. Financial Information

ITEM 1.UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Spirit Airlines, Inc.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share amounts)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Operating revenues:	Operating revenues:									Operating revenues:
Passenger	Passenger	$	1,347,871	$	846,507	$	2,297,615	$	1,296,842	Passenger	$	1,322,079	$	907,232	$	3,619,694	$	2,204,074
Other	Other	18,772		12,802		36,343		23,746		Other	21,100		15,399		57,443		39,145
Total operating revenues	Total operating revenues	1,366,643		859,309		2,333,958		1,320,588		Total operating revenues	1,343,179		922,631		3,677,137		2,243,219

Operating expenses:	Operating expenses:									Operating expenses:
Salaries, wages and benefits	Salaries, wages and benefits	308,634		257,236		614,524		502,928		Salaries, wages and benefits	311,957		277,372		926,481		780,300
Aircraft fuel	Aircraft fuel	558,633		214,825		927,218		357,755		Aircraft fuel	508,496		259,618		1,435,714		617,373
Landing fees and other rents	Landing fees and other rents	92,021		81,497		174,957		153,605		Landing fees and other rents	95,174		77,703		270,131		231,308
Depreciation and amortization	Depreciation and amortization	76,469		73,703		152,660		148,015		Depreciation and amortization	78,184		74,260		230,844		222,275
Aircraft rent	Aircraft rent	68,632		64,641		134,676		119,423		Aircraft rent	75,332		65,873		210,008		185,296
Maintenance, materials and repairs	Maintenance, materials and repairs	45,407		39,639		90,922		69,542		Maintenance, materials and repairs	45,126		41,183		136,048		110,725
Distribution	Distribution	48,724		35,263		84,075		58,905		Distribution	47,385		36,085		131,460		94,990
Loss on disposal of assets	Loss on disposal of assets	10,636		189		22,188		1,306		Loss on disposal of assets	9,374		532		31,562		1,838
Special charges (credits)	Special charges (credits)	18,004		(115,002)		33,567		(291,940)		Special charges (credits)	38,359		(85,775)		71,926		(377,715)
Other operating	Other operating	184,813		114,107		355,969		210,368		Other operating	170,182		161,785		526,151		372,153
Total operating expenses	Total operating expenses	1,411,973		766,098		2,590,756		1,329,907		Total operating expenses	1,379,569		908,636		3,970,325		2,238,543

Operating income (loss)	Operating income (loss)	(45,330)		93,211		(256,798)		(9,319)		Operating income (loss)	(36,390)		13,995		(293,188)		4,676

Other (income) expense:	Other (income) expense:									Other (income) expense:
Interest expense	Interest expense	30,124		39,662		68,004		84,468		Interest expense	23,708		35,709		91,712		120,177
Loss on extinguishment of debt	Loss on extinguishment of debt	—		331,630		—		331,630		Loss on extinguishment of debt	—		—		—		331,630
Capitalized interest	Capitalized interest	(5,677)		(4,631)		(10,939)		(9,363)		Capitalized interest	(5,964)		(4,677)		(16,903)		(14,040)
Interest income	Interest income	(2,561)		(373)		(3,028)		(4,744)		Interest income	(5,642)		(306)		(8,670)		(5,050)
Other (income) expense	Other (income) expense	296		233		713		181		Other (income) expense	402		271		1,115		452

Total other (income) expense	Total other (income) expense	22,182		366,521		54,750		402,172		Total other (income) expense	12,504		30,997		67,254		433,169

Income (loss) before income taxes	Income (loss) before income taxes	(67,512)		(273,310)		(311,548)		(411,491)		Income (loss) before income taxes	(48,894)		(17,002)		(360,442)		(428,493)
Provision (benefit) for income taxes	Provision (benefit) for income taxes	(15,106)		14,553		(64,439)		(11,307)		Provision (benefit) for income taxes	(12,517)		(31,776)		(76,956)		(43,083)

Net loss		$	(52,406)	$	(287,863)	$	(247,109)	$	(400,184)
Basic loss per share		$	(0.48)	$	(2.73)	$	(2.27)	$	(3.94)
Diluted loss per share		$	(0.48)	$	(2.73)	$	(2.27)	$	(3.94)
Net income (loss)										Net income (loss)	$	(36,377)	$	14,774	$	(283,486)	$	(385,410)
Basic income (loss) per share										Basic income (loss) per share	$	(0.33)	$	0.14	$	(2.61)	$	(3.71)
Diluted income (loss) per share										Diluted income (loss) per share	$	(0.33)	$	0.14	$	(2.61)	$	(3.71)

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Spirit Airlines, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited, in thousands)

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net loss $ (52,406) $ (287,863) $ (247,109) $ (400,184)
Unrealized gain (loss) on short-term investment securities and cash and cash equivalents, net of deferred taxes of $(50), $(5), $(128) and $(3) (171) (19) (438) (12)
Interest rate derivative loss reclassified into earnings, net of taxes of $12, $13, $26 and $27 39 44 76 89
Other comprehensive income (loss) $ (132) $ 25 $ (362) $ 77
Comprehensive loss $ (52,538) $ (287,838) $ (247,471) $ (400,107)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	(36,377)	$	14,774	$	(283,486)	$	(385,410)


Unrealized gain (loss) on short-term investment securities and cash and cash equivalents, net of deferred taxes of $32, $(1), $(96) and $(5)	109		(4)		(329)		(16)
Interest rate derivative loss reclassified into earnings, net of taxes of $11, $13, $37 and $40	38		43		114		132
Other comprehensive income (loss)	$	147	$	39	$	(215)	$	116
Comprehensive income (loss)	$	(36,230)	$	14,813	$	(283,701)	$	(385,294)

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Spirit Airlines, Inc.

Condensed Consolidated Balance Sheets

(unaudited, in thousands)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,197,065	$	1,333,507	Cash and cash equivalents	$	953,428	$	1,333,507
Restricted cash	Restricted cash	95,400		95,400		Restricted cash	95,400		95,400
Short-term investment securities	Short-term investment securities	105,920		106,313		Short-term investment securities	106,255		106,313
Accounts receivable, net	Accounts receivable, net	150,149		128,828		Accounts receivable, net	172,212		128,828
Aircraft maintenance deposits, net	Aircraft maintenance deposits, net	12,228		10,726		Aircraft maintenance deposits, net	13,756		10,726
Income tax receivable	Income tax receivable	37,890		37,890		Income tax receivable	36,363		37,890

Prepaid expenses and other current assets	Prepaid expenses and other current assets	163,202		129,827		Prepaid expenses and other current assets	173,139		129,827
Total current assets	Total current assets	1,761,854		1,842,491		Total current assets	1,550,553		1,842,491

Property and equipment:	Property and equipment:					Property and equipment:
Flight equipment	Flight equipment	4,424,409		4,356,523		Flight equipment	4,447,877		4,356,523
Ground property and equipment	Ground property and equipment	423,821		384,928		Ground property and equipment	477,752		384,928
Less accumulated depreciation	Less accumulated depreciation	(989,812)		(884,858)		Less accumulated depreciation	(1,044,492)		(884,858)
		3,858,418		3,856,593			3,881,137		3,856,593
Operating lease right-of-use assets	Operating lease right-of-use assets	2,198,791		1,950,520		Operating lease right-of-use assets	2,332,808		1,950,520
Pre-delivery deposits on flight equipment	Pre-delivery deposits on flight equipment	488,323		484,821		Pre-delivery deposits on flight equipment	496,812		484,821
Long-term aircraft maintenance deposits	Long-term aircraft maintenance deposits	27,795		38,166		Long-term aircraft maintenance deposits	25,880		38,166
Deferred heavy maintenance, net	Deferred heavy maintenance, net	342,335		330,062		Deferred heavy maintenance, net	360,034		330,062
Other long-term assets	Other long-term assets	37,507		37,372		Other long-term assets	38,271		37,372
Total assets	Total assets	$	8,715,023	$	8,540,025	Total assets	$	8,685,495	$	8,540,025

Liabilities and shareholders’ equity	Liabilities and shareholders’ equity					Liabilities and shareholders’ equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	76,048	$	44,952	Accounts payable	$	112,007	$	44,952
Air traffic liability	Air traffic liability	561,705		382,317		Air traffic liability	495,815		382,317
Current maturities of long-term debt, net and finance leases	Current maturities of long-term debt, net and finance leases	351,521		208,948		Current maturities of long-term debt, net and finance leases	353,937		208,948
Current maturities of operating leases	Current maturities of operating leases	169,195		158,631		Current maturities of operating leases	175,614		158,631

Other current liabilities	Other current liabilities	578,663		480,754		Other current liabilities	531,158		480,754
Total current liabilities	Total current liabilities	1,737,132		1,275,602		Total current liabilities	1,668,531		1,275,602

Long-term debt, net and finance leases, less current maturities	Long-term debt, net and finance leases, less current maturities	2,696,201		2,975,823		Long-term debt, net and finance leases, less current maturities	2,657,830		2,975,823
Operating leases, less current maturities	Operating leases, less current maturities	1,981,467		1,751,351		Operating leases, less current maturities	2,104,484		1,751,351
Deferred income taxes	Deferred income taxes	310,351		375,472		Deferred income taxes	297,875		375,472
Deferred gains and other long-term liabilities	Deferred gains and other long-term liabilities	116,657		47,742		Deferred gains and other long-term liabilities	116,998		47,742
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common stock	Common stock	11		11		Common stock	11		11
Additional paid-in-capital	Additional paid-in-capital	1,140,254		1,131,826		Additional paid-in-capital	1,143,076		1,131,826
Treasury stock, at cost	Treasury stock, at cost	(77,416)		(75,639)		Treasury stock, at cost	(77,446)		(75,639)
Retained earnings	Retained earnings	811,260		1,058,369		Retained earnings	774,883		1,058,369
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(894)		(532)		Accumulated other comprehensive loss	(747)		(532)
Total shareholders’ equity	Total shareholders’ equity	1,873,215		2,114,035		Total shareholders’ equity	1,839,777		2,114,035
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	8,715,023	$	8,540,025	Total liabilities and shareholders’ equity	$	8,685,495	$	8,540,025

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Spirit Airlines, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Operating activities:	Operating activities:					Operating activities:
Net loss	Net loss	$	(247,109)	$	(400,184)	Net loss	$	(283,486)	$	(385,410)
Adjustments to reconcile net income (loss) to net cash provided by operations:
Adjustments to reconcile net loss to net cash provided (used) by operations:						Adjustments to reconcile net loss to net cash provided (used) by operations:

Losses reclassified from other comprehensive income	Losses reclassified from other comprehensive income	102		116		Losses reclassified from other comprehensive income	151		172
Share-based compensation	Share-based compensation	5,723		6,740		Share-based compensation	8,545		9,972
Allowance for doubtful accounts (recoveries)	Allowance for doubtful accounts (recoveries)	(108)		170		Allowance for doubtful accounts (recoveries)	(108)		138
Amortization of debt issuance costs	Amortization of debt issuance costs	6,695		6,412		Amortization of debt issuance costs	9,897		9,685
Depreciation and amortization	Depreciation and amortization	152,660		148,015		Depreciation and amortization	230,844		222,275
Accretion of 8.00% senior secured notes	Accretion of 8.00% senior secured notes	521		753		Accretion of 8.00% senior secured notes	782		1,012
Amortization of debt discount	Amortization of debt discount	6,346		—		Amortization of debt discount	10,154		—
Deferred income tax expense (benefit)		(65,019)		(12,353)
Mark to market adjustments on derivative liability						Mark to market adjustments on derivative liability	25,200		—
Deferred income tax benefit						Deferred income tax benefit	(77,538)		(44,119)
Loss on disposal of assets	Loss on disposal of assets	22,188		1,306		Loss on disposal of assets	31,562		1,838

Loss on extinguishment of debt	Loss on extinguishment of debt	—		331,630		Loss on extinguishment of debt	—		331,630
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:

Accounts receivable, net	Accounts receivable, net	(21,213)		(98,484)		Accounts receivable, net	(43,276)		(90,860)
Aircraft maintenance deposits, net	Aircraft maintenance deposits, net	8,869		5,616		Aircraft maintenance deposits, net	9,256		42,598
Long-term deposits and other assets	Long-term deposits and other assets	(30,717)		(5,770)		Long-term deposits and other assets	(39,809)		(8,495)
Prepaid income taxes	Prepaid income taxes	—		(52)		Prepaid income taxes	—		11

Deferred heavy maintenance, net		(58,226)		(21,657)
Deferred heavy maintenance						Deferred heavy maintenance	(99,314)		(45,189)
Income tax receivable	Income tax receivable	—		109,746		Income tax receivable	1,527		109,570
Accounts payable	Accounts payable	22,798		24,024		Accounts payable	48,081		21,538
Air traffic liability	Air traffic liability	179,388		206,170		Air traffic liability	113,498		45,504
Deferred salaries, wages and benefits, net		—		86,360

Other liabilities	Other liabilities	103,591		95,193		Other liabilities	21,466		54,631
Other	Other	278		365		Other	310		538
Net cash provided by operating activities		86,767		484,116
Net cash provided (used) by operating activities						Net cash provided (used) by operating activities	(32,258)		277,039


Investing activities:	Investing activities:					Investing activities:
Purchase of available-for-sale investment securities	Purchase of available-for-sale investment securities	(38,970)		(55,936)		Purchase of available-for-sale investment securities	(59,707)		(84,134)
Proceeds from the maturity and sale of available-for-sale investment securities	Proceeds from the maturity and sale of available-for-sale investment securities	38,500		55,500		Proceeds from the maturity and sale of available-for-sale investment securities	59,000		83,500

Pre-delivery deposits on flight equipment, net of refunds	Pre-delivery deposits on flight equipment, net of refunds	(7,367)		(81,208)		Pre-delivery deposits on flight equipment, net of refunds	(15,636)		(116,771)
Capitalized interest	Capitalized interest	(8,948)		(9,055)		Capitalized interest	(13,306)		(12,704)
Assets under construction for others	Assets under construction for others	(2)		(1,170)		Assets under construction for others	(2)		(1,206)
Purchase of property and equipment	Purchase of property and equipment	(106,271)		(87,154)		Purchase of property and equipment	(174,751)		(132,131)
Net cash used in investing activities	Net cash used in investing activities	(123,058)		(179,023)		Net cash used in investing activities	(204,402)		(263,446)
Financing activities:	Financing activities:					Financing activities:
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	—		562,996		Proceeds from issuance of long-term debt	—		562,996

Proceeds from issuance of warrants	Proceeds from issuance of warrants	—		375,662		Proceeds from issuance of warrants	—		375,662

Payments on debt obligations	Payments on debt obligations	(96,755)		(857,552)		Payments on debt obligations	(139,783)		(903,168)
Payments for the early extinguishment of debt	Payments for the early extinguishment of debt	—		(317,905)		Payments for the early extinguishment of debt	—		(317,905)
Payments on finance lease obligations	Payments on finance lease obligations	(421)		(397)		Payments on finance lease obligations	(631)		(615)

Reimbursement for assets under construction for others	Reimbursement for assets under construction for others	2		959		Reimbursement for assets under construction for others	2		995
Repurchase of common stock	Repurchase of common stock	(1,777)		(1,324)		Repurchase of common stock	(1,807)		(1,352)
Debt issuance costs	Debt issuance costs	(1,200)		(2,746)		Debt issuance costs	(1,200)		(2,746)
Net cash used by financing activities	Net cash used by financing activities	(100,151)		(240,307)		Net cash used by financing activities	(143,419)		(286,133)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(136,442)		64,786
Net decrease in cash, cash equivalents, and restricted cash						Net decrease in cash, cash equivalents, and restricted cash	(380,079)		(272,540)
Cash, cash equivalents, and restricted cash at beginning of period (1)	Cash, cash equivalents, and restricted cash at beginning of period (1)	1,428,907		1,861,124		Cash, cash equivalents, and restricted cash at beginning of period (1)	1,428,907		1,861,124
Cash, cash equivalents, and restricted cash at end of period (1)	Cash, cash equivalents, and restricted cash at end of period (1)	$	1,292,465	$	1,925,910	Cash, cash equivalents, and restricted cash at end of period (1)	$	1,048,828	$	1,588,584
Supplemental disclosures	Supplemental disclosures					Supplemental disclosures
Cash payments for:	Cash payments for:					Cash payments for:
Interest, net of capitalized interest	Interest, net of capitalized interest	$	54,481	$	79,689	Interest, net of capitalized interest	$	79,791	$	105,804
Income taxes paid (received), net		$	882	$	(108,648)
Income taxes received, net						Income taxes received, net	$	(411)	$	(108,544)
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	137,408	$	132,323	Operating cash flows for operating leases	$	211,944	$	197,448

Financing cash flows for finance leases	Financing cash flows for finance leases	$	34	$	48	Financing cash flows for finance leases	$	47	$	72
Non-cash transactions:	Non-cash transactions:					Non-cash transactions:
Capital expenditures funded by finance lease borrowings	Capital expenditures funded by finance lease borrowings	$	—	$	538	Capital expenditures funded by finance lease borrowings	$	—	$	538
Capital expenditures funded by operating lease borrowings	Capital expenditures funded by operating lease borrowings	$	319,554	$	268,169	Capital expenditures funded by operating lease borrowings	$	490,690	$	511,277
(1) The sum of cash and cash equivalents and restricted cash on the Company's condensed consolidated balance sheets equals cash, cash equivalents, and restricted cash in our statement of cash flows.
(1) The sum of cash and cash equivalents and restricted cash on the Company's condensed consolidated balance sheets equals cash, cash equivalents, and restricted cash in the Company's condensed consolidated statement of cash flows.						(1) The sum of cash and cash equivalents and restricted cash on the Company's condensed consolidated balance sheets equals cash, cash equivalents, and restricted cash in the Company's condensed consolidated statement of cash flows.

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Spirit Airlines, Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited, in thousands)


		Six Months Ended June 30, 2021													Nine Months Ended September 30, 2021
		Common Stock		Additional Paid-In-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Common Stock		Additional Paid-In-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2020	Balance at December 31, 2020	$	10	$	799,549	$	(74,124)	$	1,524,878	$	(618)	$	2,249,695	Balance at December 31, 2020	$	10	$	799,549	$	(74,124)	$	1,524,878	$	(618)	$	2,249,695
Effect of ASU No. 2020-06 implementation	Effect of ASU No. 2020-06 implementation	—		(55,590)		—		6,060		—		(49,530)		Effect of ASU No. 2020-06 implementation	—		(55,590)		—		6,060		—		(49,530)
Share-based compensation	Share-based compensation	—		4,254		—		—		—		4,254		Share-based compensation	—		4,254		—		—		—		4,254
Repurchase of common stock	Repurchase of common stock	—		—		(1,307)		—		—		(1,307)		Repurchase of common stock	—		—		(1,307)		—		—		(1,307)

Changes in comprehensive income	Changes in comprehensive income	—		—		—		—		52		52		Changes in comprehensive income	—		—		—		—		52		52
Issuance of warrants	Issuance of warrants	—		2,146		—		—		—		2,146		Issuance of warrants	—		2,146		—		—		—		2,146
Net loss	Net loss	—		—		—		(112,321)		—		(112,321)		Net loss	—		—		—		(112,321)		—		(112,321)
Balance at March 31, 2021	Balance at March 31, 2021	$	10	$	750,359	$	(75,431)	$	1,418,617	$	(566)	$	2,092,989	Balance at March 31, 2021	$	10	$	750,359	$	(75,431)	$	1,418,617	$	(566)	$	2,092,989
Issuance of common stock and warrants, net	Issuance of common stock and warrants, net	1		373,186		—		—		—		373,187		Issuance of common stock and warrants, net	1		373,186		—		—		—		373,187

Share-based compensation	Share-based compensation	—		2,486		—		—		—		2,486		Share-based compensation	—		2,486		—		—		—		2,486
Repurchase of common stock	Repurchase of common stock	—		—		(17)		—		—		(17)		Repurchase of common stock	—		—		(17)		—		—		(17)

Changes in comprehensive income	Changes in comprehensive income	—		—		—		—		25		25		Changes in comprehensive income	—		—		—		—		25		25
Net loss	Net loss	—		—		—		(287,863)		—		(287,863)		Net loss	—		—		—		(287,863)		—		(287,863)
Balance at June 30, 2021	Balance at June 30, 2021	$	11	$	1,126,031	$	(75,448)	$	1,130,754	$	(541)	$	2,180,807	Balance at June 30, 2021	$	11	$	1,126,031	$	(75,448)	$	1,130,754	$	(541)	$	2,180,807

Share-based compensation														Share-based compensation	—		3,232		—		—		—		3,232
Repurchase of common stock														Repurchase of common stock	—		—		(28)		—		—		(28)

Changes in comprehensive income														Changes in comprehensive income	—		—		—		—		39		39
Net income														Net income	—		—		—		14,774		—		14,774
Balance at September 30, 2021														Balance at September 30, 2021	$	11	$	1,129,263	$	(75,476)	$	1,145,528	$	(502)	$	2,198,824


		Six Months Ended June 30, 2022													Nine Months Ended September 30, 2022
		Common Stock		Additional Paid-In-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Common Stock		Additional Paid-In-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2021	Balance at December 31, 2021	$	11	$	1,131,826	$	(75,639)	$	1,058,369	$	(532)	$	2,114,035	Balance at December 31, 2021	$	11	$	1,131,826	$	(75,639)	$	1,058,369	$	(532)	$	2,114,035

Share-based compensation	Share-based compensation	—		4,046		—		—		—		4,046		Share-based compensation	—		4,046		—		—		—		4,046
Repurchase of common stock	Repurchase of common stock	—		—		(1,772)		—		—		(1,772)		Repurchase of common stock	—		—		(1,772)		—		—		(1,772)

Changes in comprehensive income	Changes in comprehensive income	—		—		—		—		(230)		(230)		Changes in comprehensive income	—		—		—		—		(230)		(230)

Net loss	Net loss	—		—		—		(194,703)		—		(194,703)		Net loss	—		—		—		(194,703)		—		(194,703)
Balance at March 31, 2022	Balance at March 31, 2022	$	11	$	1,135,872	$	(77,411)	$	863,666	$	(762)	$	1,921,376	Balance at March 31, 2022	$	11	$	1,135,872	$	(77,411)	$	863,666	$	(762)	$	1,921,376
Convertible debt conversions	Convertible debt conversions	—		2,705		—		—		—		2,705		Convertible debt conversions	—		2,705		—		—		—		2,705

Share-based compensation	Share-based compensation	—		1,677		—		—		—		1,677		Share-based compensation	—		1,677		—		—		—		1,677
Repurchase of common stock	Repurchase of common stock	—		—		(5)		—		—		(5)		Repurchase of common stock	—		—		(5)		—		—		(5)

Changes in comprehensive income	Changes in comprehensive income	—		—		—		—		(132)		(132)		Changes in comprehensive income	—		—		—		—		(132)		(132)
Net loss	Net loss	—		—		—		(52,406)		—		(52,406)		Net loss	—		—		—		(52,406)		—		(52,406)
Balance at June 30, 2022	Balance at June 30, 2022	$	11	$	1,140,254	$	(77,416)	$	811,260	$	(894)	$	1,873,215	Balance at June 30, 2022	$	11	$	1,140,254	$	(77,416)	$	811,260	$	(894)	$	1,873,215

Share-based compensation														Share-based compensation	—		2,822		—		—		—		2,822
Repurchase of common stock														Repurchase of common stock	—		—		(30)		—		—		(30)

Changes in comprehensive income														Changes in comprehensive income	—		—		—		—		147		147
Net loss														Net loss	—		—		—		(36,377)		—		(36,377)
Balance at September 30, 2022														Balance at September 30, 2022	$	11	$	1,143,076	$	(77,446)	$	774,883	$	(747)	$	1,839,777

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Spirit Airlines, Inc. (“Spirit”) and its consolidated subsidiaries (the "Company").

These unaudited condensed consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the audited annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 8, 2022.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect both the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

The interim results reflected in the unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year. The air transportation business is subject to significant seasonal fluctuations as demand is generally greater in the second and third quarters of each year. However, beginning in early 2020, as a result of the COVID-19 pandemic, demand has not always been in line with such trends. The air transportation business is volatile and highly affected by economic cycles and trends.

2. Merger

Termination of Frontier Merger

On July 27, 2022, Spirit, Frontier Group Holdings, Inc., a Delaware corporation (“Frontier”), and Top Gun Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary of Frontier (“Frontier Merger Sub”), entered into a Termination Agreement (the “Termination Agreement”), pursuant to which the parties agreed to terminate the Agreement and Plan of Merger, dated as of February 5, 2022 (as amended on June 2, 2022 and June 24, 2022, the “Frontier Merger Agreement”), among Spirit, Frontier and Frontier Merger Sub, effective immediately. Under the terms of the Termination Agreement, Spirit paid $25.0 million in cash to Frontier for Frontier’s reasonable and documented out-of-pocket costs and expenses (the “Frontier Expenses”).

Announcement of JetBlue Merger

On July 28, 2022, Spirit entered into an Agreement and Plan of Merger (the “Merger Agreement”) with JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), and Sundown Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary of JetBlue (“Merger Sub”), pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving entity (the “Merger”). As a result of the Merger, each ~~existing~~outstanding share of Spirit's common stock (except for dissenting shares, treasury stock, and shares of Spirit's common stock owned by JetBlue, Merger Sub or any of their respective wholly owned subsidiaries), will be converted into the right to receive an amount in cash per share, without interest, equal to (such amount, the “Merger Consideration”) (i) $33.50 minus (ii) (A) $2.50 (the “Approval Prepayment Amount”), to the extent paid (the “Approval Prepayment”) upon the adoption by Spirit stockholders of the Merger Agreement (or, in the event that the closing of the Merger (the “Closing”) occurs after the record date for the prepayment of, but before the payment date of, such Approval Prepayment Amount, to the extent payable after the Closing), and (B) an additional per share prepayment amount calculated as the product of $0.10 and the number of additional prepayments paid (or, in the event the Closing occurs after the record date of, but before the payment date of any such additional prepayment, to the extent payable after the Closing), not to exceed $1.15 per share of Spirit common stock, by JetBlue to Spirit stockholders in accordance with the Merger Agreement after December 31, 2022 (each such payment is referred to as an “Additional Prepayment” and such $0.10 amount is referred to as the “Additional Prepayment Amount”).

JetBlue will pay or cause to be paid the Approval Prepayment Amount to Spirit stockholders as of the record date established by Spirit for the special meeting to approve the Merger Agreement within five business days following such Spirit stockholder approval. Thereafter, on or prior to the last business day of each month beginning after December 31, 2022 until the earlier of the Closing or termination of the Merger Agreement, JetBlue will also pay or cause to be paid the Additional Prepayment Amount to Spirit stockholders as of a record date not more than 5 business days prior to the last business day of such month. The Company expects payments made from JetBlue to Spirit stockholders will not impact the Company's results of operations or cash flows. Under the terms of the Merger Agreement, JetBlue reimbursed the Company for the $25.0 million Frontier Expenses discussed above.

On October 19, 2022, Spirit’s stockholders approved the Merger Agreement at a special meeting of stockholders. The record date for both the Company’s special meeting and the Approval Prepayment is September 12, 2022. Therefore, all Spirit stockholders of record as of September 12, 2022 are entitled to receive the Approval Prepayment in accordance with the Merger Agreement. On October 26, 2022, JetBlue paid the Spirit stockholders the Approval Prepayment Amount of $2.50 per share.

Completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including, among other things: (1) approval of the transactions by Spirit’s ~~stockholders;~~stockholders, which was received on October 19, 2022; (2) receipt of applicable regulatory approvals, including approvals from the U.S. Federal Communications Commission, the U.S. Federal Aviation Administration and the U.S. Department of Transportation ("DOT") and the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other competition laws, and other required regulatory approvals; (3) the absence of any law or order prohibiting the consummation of the transactions; and (4) the absence of any material adverse effect (as defined in the Merger Agreement) on Spirit.

Spirit, JetBlue and Merger Sub each make certain customary representations, warranties and covenants, as applicable, in the Merger Agreement.

In addition, Spirit has agreed, among other things, that neither it nor any of its directors, officers, employees and representatives will (1) solicit alternative transactions, (2) participate in any discussions or negotiations relating to alternative transactions, (3) furnish any non-public information in connection with alternative transactions or (4) enter into any agreement relating to alternative transactions, except under limited circumstances described in the Merger Agreement. However, in certain circumstances, Spirit may terminate the Merger Agreement to enter into a definitive agreement for a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement contains certain ~~customary~~ termination rights for Spirit and JetBlue, including, without limitation, a right for either party to terminate if the Merger is not consummated on or before July 28, 2023, subject to certain extensions up to July 24, 2024 if needed to obtain regulatory approvals. Upon the termination of the Merger Agreement under specified circumstances, Spirit will be required to pay JetBlue a ~~breakup~~termination fee of $94.2 million. Upon the termination of the Merger Agreement by JetBlue because of a material, uncured breach by Spirit of the Merger Agreement, Spirit will be required to pay JetBlue an amount equal to the sum of all amounts paid by JetBlue to the Spirit stockholders. Upon the termination of the Merger Agreement for failure to obtain antitrust regulatory clearance, JetBlue will be required to pay (i) to Spirit, $70.0 million, and (ii) to the Spirit stockholders, the excess of (A) $400.0 million minus (B) the sum of the Approval Prepayment Amount and all Additional Prepayment Amounts previously paid by JetBlue to the Spirit stockholders.

3. Revenue

Operating revenues are comprised of passenger revenues, which includes fare and non-fare revenues, and other revenues. The following table shows disaggregated operating revenues for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in thousands)									(in thousands)
Operating revenues:	Operating revenues:									Operating revenues:
Fare	Fare	$	703,778	$	369,691	$	1,122,196	$	543,978	Fare	$	673,848	$	421,015	$	1,796,044	$	964,993
Non-fare	Non-fare	644,093		476,816		1,175,419		752,864		Non-fare	648,231		486,217		1,823,650		1,239,081
Total passenger revenues	Total passenger revenues	1,347,871		846,507		2,297,615		1,296,842		Total passenger revenues	1,322,079		907,232		3,619,694		2,204,074
Other	Other	18,772		12,802		36,343		23,746		Other	21,100		15,399		57,443		39,145
Total operating revenues	Total operating revenues	$	1,366,643	$	859,309	$	2,333,958	$	1,320,588	Total operating revenues	$	1,343,179	$	922,631	$	3,677,137	$	2,243,219

The Company is managed as a single business unit that provides air transportation for passengers. Operating revenues by geographic region as defined by the DOT are summarized below:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in thousands)									(in thousands)
DOT—Domestic	DOT—Domestic	$	1,165,746	$	770,800	$	1,993,200	$	1,177,964	DOT—Domestic	$	1,163,193	$	801,766	$	3,154,984	$	1,980,762
DOT—Latin America	DOT—Latin America	200,897		88,509		340,758		142,624		DOT—Latin America	179,986		120,865		522,153		262,457
Total	Total	$	1,366,643	$	859,309	$	2,333,958	$	1,320,588	Total	$	1,343,179	$	922,631	$	3,677,137	$	2,243,219

The Company defers the amount for award travel obligations as part of loyalty deferred revenue within air traffic liability ("ATL") on the Company's condensed consolidated balance sheets and recognizes loyalty travel awards in passenger revenues as points are used for travel or expire unused.

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ATL balances of ~~$561.7~~$495.8 million and $382.3 million, respectively. Substantially all of the Company's ATL is expected to be recognized within 12 months of the respective balance sheet date.

Loyalty Programs

The Company operates the Spirit Saver$ Club®, which is a subscription-based loyalty program that allows members access to unpublished, extra-low fares as well as discounted prices on bags and seats, shortcut boarding and security, "Flight Flex" flight modification product, and exclusive offers on hotels, rental cars and other travel necessities. The Company also operates the Free Spirit loyalty program, which attracts members and partners and builds customer loyalty for the Company by offering a variety of awards, benefits and services. Free Spirit loyalty program members earn and accrue points for dollars spent on Spirit for flights and other non-fare services as well as services from non-air partners such as retail merchants, hotels or car rental companies or by making purchases with credit cards issued by partner banks and financial services providers. Points earned and accrued by Free Spirit loyalty program members can be redeemed for travel awards such as free (other than taxes and government-imposed fees), discounted or upgraded travel.

4. Loss on Disposal

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded ~~$10.6~~$9.4 million and ~~$22.2~~$31.6 million, respectively, in loss on disposal of assets in the condensed consolidated statements of operations. Loss on disposal of assets for the three months ended ~~June~~September 30, 2022 primarily consisted of ~~$10.2~~$9.4 million related to the loss on 4four aircraft sale leaseback transactions completed during the ~~second~~third quarter of 2022. Loss on disposal of assets for the ~~six~~nine months ended ~~June~~September 30, 2022 primarily consisted of ~~$14.5~~$23.8 million related to the loss on 711 aircraft sale leaseback transactions completed during the ~~first and second quarters of~~nine months ended September 30, 2022 and $6.6 million related to the impairment of 1one spare engine during the first quarter of 2022 which was damaged beyond economic repair.

During the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded ~~$0.2~~$0.5 million and ~~$1.3~~$1.8 million, respectively, in loss on disposal of assets in the condensed consolidated statements of operations. Loss on disposal of assets for the three months ended ~~June~~September 30, 2021 primarily consisted of ~~$0.2~~$0.5 million related to the loss on 2one aircraft sale leaseback ~~transactions~~transaction completed during the ~~second~~third quarter of 2021. Loss on disposal of assets for the ~~six~~nine months ended ~~June~~September 30, 2021 primarily consisted of $1.1 million related to the sale of auxiliary power units ("APUs"), ~~$0.2~~$0.6 million related to the loss on 2three aircraft sale leaseback transactions completed during the second ~~quarter~~and third quarters of 2021 and disposal of excess and obsolete inventory.

5. Special Charges (Credits)

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded ~~$10.4~~$17.7 million and ~~$21.5~~$39.2 million, respectively, within special charges (credits) on the Company's condensed consolidated statements of operations, in legal, advisory and other fees related to the former Frontier Merger Agreement, ~~and~~ JetBlue's unsolicited proposal, received in ~~April~~March 2022, to acquire all of the Company's outstanding shares in an all-cash ~~transaction. In addition, as~~transaction and the JetBlue Merger Agreement entered into on July 28, 2022.

As part of the former Frontier Merger Agreement, the Company implemented an employee retention bonus program. On July 27, 2022, the Frontier Merger Agreement was mutually ~~terminated,~~terminated; therefore, 50% of the target retention bonus was awarded to the Company's employees during the third quarter of 2022. In addition, as part of the JetBlue Merger Agreement, the Company implemented an additional employee retention bonus program during the third quarter of 2022. The target retention bonus will be paid to the Company's employees upon the successful close of the Merger. In the event the Merger fails or is abandoned, 50% of the target retention bonus will be paid to the Company's employees ~~during~~upon termination of the ~~third quarter of 2022.~~Merger. During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded ~~$7.6~~$20.6 million and ~~$12.1~~$32.7 million, respectively, within special charges (credits) on the Company's condensed consolidated statements of operations, related to the Company's retention bonus ~~program.~~programs.

During the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded ~~$99.3~~$86.4 million and ~~$255.8~~$342.2 million, respectively, net of related costs, within special credits on the Company’s condensed consolidated statements of operations related to the grant component of the agreements with the United States Department of the Treasury (the "Treasury") pursuant to the Consolidated Appropriations Act, which extended the Payroll Support Program (“PSP”) portion of the CARES Act through March 31, 2021 (“PSP2”) and the American Rescue Plan Act of 2021, which also authorized the Treasury to provide additional assistance to passenger air carriers that received financial assistance under PSP2 (“PSP3”).

In addition, during the ~~three~~first and ~~six months ended June 30,~~second quarters of 2021, the Company recorded ~~$16.3 million and~~ $37.5 million ~~respectively,~~ related to the CARES Act Employee Retention credit within special credits on the Company’s condensed consolidated statements of operation. During the third quarter of 2021, the Company did not qualify for the employee retention credit. These special credits were partially offset by $0.6 million and ~~$1.4~~$2.0 million in special charges recorded during the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The $0.6 million and ~~$1.4~~$2.0 million were related to salaries, wages and benefits paid to rehired employees, previously terminated with the Company's involuntary employee separation program, in compliance with the restrictions of ~~PSP2.~~PSP2 and PSP3.

6. ~~Loss~~Earnings (Loss) per Share

The following table sets forth the computation of basic and diluted ~~loss~~earnings (loss) per common share:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(in thousands, except per-share amounts)									(in thousands, except per-share amounts)
Numerator	Numerator									Numerator
Net loss		$	(52,406)	$	(287,863)	$	(247,109)	$	(400,184)

Net income (loss)										Net income (loss)	$	(36,377)	$	14,774	$	(283,486)	$	(385,410)
Interest on convertible debt, net of income taxes										Interest on convertible debt, net of income taxes	N/A		259		N/A		N/A
Net income after assumed conversions for diluted earnings per share										Net income after assumed conversions for diluted earnings per share	N/A		$	15,033	N/A		N/A
Denominator	Denominator									Denominator
Weighted-average shares outstanding, basic	Weighted-average shares outstanding, basic	108,697		105,258		108,639		101,537		Weighted-average shares outstanding, basic	108,853		108,403		108,711		103,851
Effect of dilutive shares(1)	Effect of dilutive shares(1)	—		—		—		—		Effect of dilutive shares(1)	—		2,632		—		—
Adjusted weighted-average shares outstanding, diluted	Adjusted weighted-average shares outstanding, diluted	108,697		105,258		108,639		101,537		Adjusted weighted-average shares outstanding, diluted	108,853		111,035		108,711		103,851
Loss per share
Basic loss per common share		$	(0.48)	$	(2.73)	$	(2.27)	$	(3.94)
Diluted loss per common share		$	(0.48)	$	(2.73)	$	(2.27)	$	(3.94)
Earnings (loss) per share										Earnings (loss) per share
Basic earnings (loss) per common share										Basic earnings (loss) per common share	$	(0.33)	$	0.14	$	(2.61)	$	(3.71)
Diluted earnings (loss) per common share										Diluted earnings (loss) per common share	$	(0.33)	$	0.14	$	(2.61)	$	(3.71)

(1) Includes the effect of dilutive shares related to the convertible debt due in 2025, restricted stock awards, performance share awards and warrants issued.

Anti-dilutive common stock equivalents excluded from the diluted loss per share calculation for any of the periods presented are not material.

7. Short-term Investment Securities

The Company's short-term investment securities are classified as available-for-sale and generally consist of U.S. Treasury and U.S. government agency securities with contractual maturities of 12 months or less. These securities are stated at fair value within current assets on the Company's condensed consolidated balance sheets. Realized gains and losses on sales of investments, if any, are reflected in non-operating other (income) expense in the condensed consolidated statements of operations.

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ~~$105.9 million and~~ $106.3 million ~~respectively,~~ in short-term available-for-sale investment ~~securities, respectively.~~securities. During the ~~six~~nine months ended ~~June~~September 30, 2022, these investments earned interest income at a weighted-average fixed rate of approximately ~~0.3%~~0.5%. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, an unrealized gain of $100 thousand and unrealized loss of ~~$173 thousand and $435~~$335 thousand, respectively, net of deferred taxes, ~~of $51 thousand and $127 thousand, respectively,~~ was recorded within accumulated other comprehensive income ("AOCI") related to these investment securities. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, an unrealized loss of ~~$13~~$1 thousand and $6$8 thousand, respectively, net of deferred taxes, ~~of $4 thousand and $2 thousand, respectively,~~was recorded within AOCI related to these investment securities. For the three and ~~six~~nine months ended ~~June~~September 30, 2022 and ~~June~~September 30, 2021, the Company had no realized gains or losses as the Company did not sell any of these securities during these periods. AsAs of ~~June~~September 30, 2022 and December 31, 2021, ~~$478~~$378 thousand and~~$43~~ $43 thousand, net of tax, respectively, remained in AOCI, related to these instruments.

8. Accrued Liabilities

Other current liabilities as of ~~June~~September 30, 2022 and December 31, 2021 ~~consist~~consisted of the following:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(in thousands)					(in thousands)
Salaries, wages and benefits	Salaries, wages and benefits	$	156,025	$	142,893	Salaries, wages and benefits	$	162,455	$	142,893
Federal excise and other passenger taxes and fees payable	Federal excise and other passenger taxes and fees payable	122,040		77,409		Federal excise and other passenger taxes and fees payable	88,401		77,409
Airport obligations						Airport obligations	78,890		85,772
Fuel	Fuel	94,151		55,103		Fuel	54,313		55,103
Airport obligations		83,149		85,772
Aircraft maintenance	Aircraft maintenance	39,193		39,178		Aircraft maintenance	46,861		39,178
Interest payable	Interest payable	23,719		24,526		Interest payable	25,412		24,526
Aircraft and facility lease obligations	Aircraft and facility lease obligations	22,049		23,049		Aircraft and facility lease obligations	22,729		23,049
Other	Other	38,337		32,824		Other	52,097		32,824
Other current liabilities	Other current liabilities	$	578,663	$	480,754	Other current liabilities	$	531,158	$	480,754

9.Leases

The Company leases aircraft, engines, airport terminals, maintenance and training facilities, aircraft hangars, commercial real estate, and office and computer equipment, among other items. Certain of these leases include provisions for variable lease payments which are based on several factors, including, but not limited to, relative leased square footage, enplaned passengers, and airports’ annual operating budgets. Due to the variable nature of the rates, these leases are not recorded on the Company's condensed consolidated balance sheets as a right-of-use asset and lease liability. Lease terms are generally 8 years to 18 years for aircraft and up to 99 years for other leased equipment and property.

During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company took delivery of 711 aircraft under sale leaseback transactions and 23 spare engines purchased with cash. As of ~~June~~September 30, 2022, the Company had a fleet consisting of ~~180~~184 A320 family aircraft. As of ~~June~~September 30, 2022, the Company had 7478 aircraft financed under operating leases with lease term expirations between 2024 and 2040. In addition, the Company owned 105 aircraft of which 33 were purchased off lease and were unencumbered as of ~~June~~September 30, 2022. The Company also had 1one aircraft recorded as a failed sale leaseback. The related finance obligation is recorded within long-term debt in the Company's condensed consolidated balance sheets. Refer to Note 12, Debt and Other Obligations for additional information. The related asset is recorded within flight equipment in the Company's condensed consolidated balance sheets. As of ~~June~~September 30, 2022, the Company also had 126 spare engines financed under operating leases with lease term expiration dates ranging from ~~2022~~2024 to 2033 and owned 2223 spare engines, of which, as of ~~June~~September 30, 2022, ~~1 was~~2 were unencumbered and 21 were pledged as collateral under the Company's revolving credit facility maturing in 2024.

As of ~~June~~September 30, 2022, 1one of the Company’s aircraft and engine master lease agreements provides that the Company pays maintenance reserves to aircraft lessors to be held as collateral in advance of the Company’s required performance of major maintenance activities. A majority of these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles, while some maintenance reserve payments are fixed, time-based contractual amounts. Maintenance reserve payments that are probable of being recovered when the Company performs qualifying maintenance are recorded in aircraft maintenance deposits on the Company's condensed consolidated balance sheets. Fixed maintenance reserve payments that are not probable of being recovered are considered lease payments and are included in the right-of-use asset and lease liability. Maintenance reserve payments that are based on a utilization measure and are not probable of being recovered are considered variable lease payments that are recognized when they are probable of being incurred and are not included in the right-of-use asset and lease liability.

Some of the master lease agreements do not require that the Company pay maintenance reserves so long as the Company's cash balance does not fall below a certain level. As of ~~June~~September 30, 2022, the Company was in full compliance with those requirements and does not anticipate having to pay reserves related to these master leases in the future.

Aircraft rent expense consists of monthly lease rents for aircraft and spare engines under the terms of the Company's aircraft and spare engine lease agreements recognized on a straight-line basis. Aircraft rent expense also includes maintenance reserves paid to aircraft lessors in advance of the performance of major maintenance activities that are not probable of being reimbursed and probable lease return condition obligations.

Under the terms of the lease agreements, the Company will continue to operate and maintain the aircraft. Payments under the majority of the lease agreements are fixed for the term of the lease. The lease agreements contain standard termination events, including termination upon a breach of the Company's obligations to make rental payments and upon any other material breach of the Company's obligations under the leases, and standard maintenance and return condition provisions. These return provisions are evaluated at inception of the lease and throughout the lease terms and are accounted for as either fixed or variable lease payments (depending on the nature of the lease return condition) when it is probable that such amounts will be incurred. When determining probability and estimated cost of lease return obligations, there are various other factors that need to be considered such as the contractual terms of the lease, the ability to swap engines or other aircraft components, current condition of the aircraft, the age of the aircraft at lease expiration, utilization of engines and other components, the extent of repairs needed at return, return locations, current configuration of the aircraft and cost of repairs and materials at the time of return. Management assesses the factors listed above and the need to accrue lease return costs throughout the lease as facts and circumstances warrant an assessment. The Company expects lease return costs and unrecoverable maintenance deposits will increase as individual aircraft lease agreements approach their respective termination dates and the Company begins to accrue the estimated cost of return conditions for the corresponding aircraft. Upon a termination of the lease due to a breach by the Company, the Company would be liable for standard contractual damages, possibly including damages suffered by the lessor in connection with remarketing the aircraft or while the aircraft is not leased to another party.

As of ~~June~~September 30, 2022, the Company's finance lease obligations primarily relate to the lease of computer equipment used by the Company's flight crew and office equipment. Payments under these finance lease agreements are fixed for terms ranging from 4 to 5 years. Finance lease assets are recorded within property and equipment and the related liabilities are recorded within long-term debt and finance leases in the Company's condensed consolidated balance sheets.

During the fourth quarter of 2019, the Company purchased an 8.5-acre parcel of land for $41.0 million and entered into a 99-year lease agreement for the lease of a 2.6-acre parcel of land, in Dania Beach, Florida, where the Company is building its new headquarters campus and a 200-unit residential building. During the first quarter of 2022, the Company began building its new headquarters campus and its 200-unit residential building with an expected completion during the fourth quarter 2023. The 8.5-acre parcel of land is capitalized within ground property and equipment on the Company's condensed consolidated balance sheets. The 99-year lease was determined to be an operating lease and is recorded within operating lease right-of-use asset and operating lease liability on the Company's condensed consolidated balance sheets. Operating lease commitments related to this lease are included in the table below within property facility leases.

The following table provides details of the Company's future minimum lease payments under finance lease liabilities and operating lease liabilities recorded on the Company's condensed consolidated balance sheets as of ~~June~~September 30, 2022. The table does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.


		Finance Leases		Operating Leases									Finance Leases		Operating Leases
				Aircraft and Spare Engine Leases		Property Facility Leases		Other		Total Operating and Finance Lease Obligations					Aircraft and Spare Engine Leases		Property Facility Leases		Other		Total Operating and Finance Lease Obligations
		(in thousands)											(in thousands)
Remainder of 2022	Remainder of 2022	$	421	$	141,250	$	2,882	$	79	$	144,632	Remainder of 2022	$	210	$	74,815	$	1,598	$	39	$	76,662
2023	2023	465		279,258		5,763		13		285,499		2023	465		296,016		6,385		13		302,879
2024	2024	215		267,172		3,885		—		271,272		2024	215		283,930		4,526		—		288,671
2025	2025	117		252,230		1,212		—		253,559		2025	117		269,042		3,072		—		272,231
2026	2026	38		225,970		964		—		226,972		2026	39		242,728		2,989		—		245,756
2027 and thereafter	2027 and thereafter	—		1,904,800		142,174		—		2,046,974		2027 and thereafter	—		2,134,609		143,389		—		2,277,998
Total minimum lease payments	Total minimum lease payments	$	1,256	$	3,070,680	$	156,880	$	92	$	3,228,908	Total minimum lease payments	$	1,046	$	3,301,140	$	161,959	$	52	$	3,464,197
Less amount representing interest	Less amount representing interest	56		944,235		132,754		1		1,077,046		Less amount representing interest	43		1,049,330		133,723		—		1,183,096
Present value of minimum lease payments	Present value of minimum lease payments	$	1,200	$	2,126,445	$	24,126	$	91	$	2,151,862	Present value of minimum lease payments	$	1,003	$	2,251,810	$	28,236	$	52	$	2,281,101
Less current portion	Less current portion	665		164,532		4,572		91		169,860		Less current portion	569		170,740		4,822		52		176,183
Long-term portion	Long-term portion	$	535	$	1,961,913	$	19,554	$	—	$	1,982,002	Long-term portion	$	434	$	2,081,070	$	23,414	$	—	$	2,104,918

Commitments related to the Company's noncancellable short-term operating leases not recorded on the Company's condensed consolidated balance sheets are expected to be ~~$3.2~~$3.6 million for the remainder of 2022 and none for 2023 and beyond.

The table below presents information for lease costs related to the Company's finance and operating leases:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
(in thousands)
Finance lease cost
Amortization of leased assets $ 188 $ 176 $ 375 $ 345
Interest of lease liabilities 16 24 34 48
Operating lease cost
Operating lease cost (1)
65,430 52,632 128,681 104,774
Short-term lease cost (1)
9,551 7,076 19,808 14,091
Variable lease cost (1)
50,128 50,511 98,723 88,661
Total lease cost $ 125,313 $ 110,419 $ 247,621 $ 207,919


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Finance lease cost
Amortization of leased assets	$	188	$	194	$	563	$	539
Interest of lease liabilities	13		23		47		72
Operating lease cost
Operating lease cost (1)	66,241		56,991		194,922		161,764
Short-term lease cost (1)	10,451		7,638		30,259		21,729
Variable lease cost (1)	54,711		45,387		153,433		134,047
Total lease cost	$	131,604	$	110,233	$	379,224	$	318,151

(1) Expenses are classified within aircraft rent and landing fees and other rents on the Company's condensed consolidated statements of operations.

The table below presents lease terms and discount rates related to the Company's finance and operating leases:

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Weighted-average remaining lease term

Operating leases

14.1 years

13.7 years

Operating leases

14.5 years

13.9 years

Finance leases

2.2 years

2.9 years

Finance leases

2.1 years

2.7 years

Weighted-average discount rate

Operating leases

5.80

5.92

Operating leases

5.94

5.81

Finance leases

4.60

4.91

Finance leases

4.45

4.86

10. Commitments and Contingencies

Aircraft-Related Commitments and Financing Arrangements

The Company’s contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies. As of ~~June~~September 30, 2022, the Company's total firm aircraft orders consisted of ~~113~~114 A320 family aircraft with Airbus, including A319neos, A320neos and A321neos, with deliveries expected through 2027. Out of these ~~113~~114 aircraft, the Company has 106 aircraft scheduled for delivery in the remainder of 2022 and 17 aircraft scheduled for delivery in 2023. As of ~~June~~September 30, 2022, the Company had secured financing for the 106 aircraft scheduled for delivery from Airbus through the remainder of 2022, which will be financed through sale leaseback transactions. As of ~~June~~September 30, 2022, the Company did not have financing commitments in place for the remaining ~~103~~108 Airbus aircraft on firm order through 2027. However, the Company has a financing letter of agreement with Airbus which provides backstop financing for a majority of the aircraft included in the A320 NEO Family Purchase Agreement signed in the fourth quarter of 2019. The agreement provides a standby credit facility in the form of senior secured mortgage debt financing. The contractual purchase amounts for all aircraft orders from Airbus are included within the purchase commitments below.

During the third quarter of 2021, the Company entered into an Engine Purchase Support Agreement which requires the Company to purchase a certain number of spare engines in order to maintain a contractual ratio of spare engines to aircraft in the fleet. As of ~~June~~September 30, 2022, the Company is committed to purchase 1413 PW1100G-JM spare engines, with deliveries through 2027.

As of ~~June~~September 30, 2022, purchase commitments for the Company's aircraft and engine orders, including estimated amounts for contractual price escalations and pre-delivery payments, are expected to be ~~$507.3~~$297.1 million for the remainder of 2022, ~~$906.9~~$907.1 million in 2023, ~~$999.8~~$1,045.6 million in 2024, ~~$1,060.7~~$1,226.1 million in 2025, ~~$1,349.9~~$1,424.4 million in 2026, and ~~$872.8~~$862.8 million in 2027 and beyond.

During the third quarter of 2019, the United States announced its decision to levy tariffs on certain imports from the European Union, including commercial aircraft and related parts. These tariffs include aircraft and other parts that the Company is already contractually obligated to purchase including those reflected above. In June 2021, the United States Trade Representative announced that the United States and European Union had agreed to suspend reciprocal tariffs on large civilian aircraft for five years, pending discussions to resolve their trade dispute.

In addition to the aircraft purchase agreement, as of ~~June~~September 30, 2022, the Company has agreements in place for 40 A320neos and A321neos to be financed through direct leases with third-party lessors with deliveries scheduled from the remainder of 2022 through 2024. As of ~~June~~September 30, 2022, aircraft rent commitments for future aircraft deliveries to be financed under direct leases from third-party lessors and sale leaseback transactions are expected to be approximately ~~$18.0~~$8.6 million for the remainder of 2022, ~~$110.8~~$92.7 million in 2023, ~~$188.9~~$187.8 million in 2024, ~~$217.9~~$216.4 million in 2025, ~~$217.9~~$216.4 million in 2026, and ~~$1,861.5~~$1,874.8 million in 2027 and beyond.

Interest commitments related to the secured debt financing of 73 delivered aircraft as of ~~June��~~September 30, 2022 are ~~$46.2~~$18.9 million for the remainder of 2022, $64.6 million in 2023, $53.3 million in 2024, $45.8 million in 2025, $38.3 million in 2026, and $90.3 million in 2027 and beyond. As of ~~June~~September 30, 2022, interest commitments related to the Company's 8.00% senior secured notes, convertible debt financing, unsecured term loans and revolving credit facility are ~~$24.5~~$13.6 million for the remainder of 2022, $48.4 million in 2023, $48.4 million in 2024, $45.4 million in 2025, $5.9 million in 2026, and $14.0 million in 2027 and beyond. For principal commitments related to the Company's debt financing, refer to Note 12, Debt and Other Obligations.

The Company is contractually obligated to pay the following minimum guaranteed payments for its reservation system, construction commitments related to its new headquarters campus and residential building and other miscellaneous subscriptions and services as of ~~June~~September 30, 2022: ~~$34.3~~$74.8 million for the remainder of 2022, ~~$21.7~~$38.2 million in 2023, $18.1 million in 2024, $18.1 million in 2025, $17.5 million in 2026, and $19.2 million in 2027 and thereafter. During the first quarter of 2018, the Company entered into a contract renewal with its reservation system provider which expires in 2028.

Litigation and Assessments

The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. The Company believes the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on its financial position, liquidity or results of operations. In making a determination regarding accruals, using available information, the Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings and assessments to which the Company is a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of the Company's defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from the Company's current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to the Company's consolidated results of operations, liquidity, or financial condition.

In 2017, the Company was sued in the Eastern District of New York in a purported class action, Cox, et al. v. Spirit Airlines, Inc., alleging state-law claims of breach of contract, unjust enrichment and fraud relating to the Company's practice of charging fees for ancillary products and services. The original action was dismissed by the District Court; however, following the plaintiff’s appeal to the Second Circuit, the case was remanded to the District Court for further review on the breach of contract claim. A hearing on the Company's Motion for Summary Judgment and plaintiff’s Motion for Class Certification was held on December 10, 2021. The Court granted the plaintiff’s class certification motion on March 29, 2022. The Company subsequently filed a motion for reconsideration on April 26, 2022 and an oral argument was held on May 19, 2022. The Company intends to vigorously defend against this lawsuit. As of September 30, 2022, the potential outcomes of these claims cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made.

Following an audit by the Internal Revenue Service ("IRS") related to the collection of federal excise taxes on optional passenger seat selection charges covering the period of the second quarter 2018 through the fourth quarter 2020, on March 31, 2022, the Company was assessed $34.9 million. On July 19, 2022, the assessment was reduced to $27.5 million. The Company believes a loss in this matter is not probable and has not recognized a loss contingency.

Credit Card Processing Arrangements

The Company has agreements with organizations that process credit card transactions arising from the purchase of air travel, baggage charges, and other ancillary services by customers. As is standard in the airline industry, the Company's contractual arrangements with credit card processors permit them, under certain circumstances, to retain a holdback or other collateral, which the Company records as restricted cash, when future air travel and other future services are purchased via credit card transactions. The required holdback is the percentage of the Company's overall credit card sales that its credit card processors hold to cover refunds to customers if the Company fails to fulfill its flight obligations.

The Company's credit card processors do not require the Company to maintain cash collateral provided that the Company satisfies certain liquidity and other financial covenants. Failure to meet these covenants would provide the processors the right to place a holdback resulting in a commensurate reduction of unrestricted cash. As of ~~June~~September 30, 2022 and December 31, 2021, the Company's credit card processors were holding back no remittances.

The maximum potential exposure to cash holdbacks by the Company's credit card processors, based upon advance ticket sales and Spirit Saver$ Club® memberships as of ~~June~~September 30, 2022 and December 31, 2021, was ~~$632.5~~$558.9 million and $371.8 million, respectively.

Employees

The Company has 5 union-represented employee groups that together represented approximately ~~79%~~80% of all employees as of ~~June~~September 30, 2022. The table below sets forth the Company's employee groups and status of the collective bargaining agreements as of ~~June~~September 30, 2022.

Employee Groups

Representative

Amendable Date (1)

Percentage of Workforce

Pilots

Air Line Pilots Association, International ("ALPA")

February 2023

27%

Flight Attendants

Association of Flight Attendants ("AFA-CWA")

September 2021

~~46%~~47%

Dispatchers

Professional Airline Flight Control Association ("PAFCA")

October 2023

Ramp Service Agents

International Association of Machinists and Aerospace Workers ("IAMAW")

November 2026

Passenger Service Agents

Transport Workers Union of America ("TWU")

February 2027

(1) Subject to standard early opener provisions.

In September 2022, ALPA notified the Company of its intent to amend the current CBA with its pilots and began negotiations. As of September 30, 2022, the Company continued to negotiate with ALPA.

The Company's passenger service agents are represented by the TWU, but the representation applies only to the Company's Fort Lauderdale station where the Company has direct employees in the passenger service classification. The Company and the TWU began meeting in late October 2018 to negotiate an initial collective bargaining agreement. During February 2022, the Company reached a tentative agreement with the TWU. The Company's passenger service agents ratified the five-year agreement on February 21, 2022.

In February 2021, the Company entered into a Letter of Agreement with the AFA-CWA to change the amendable date of the collective bargaining agreement from May 4, 2021 to September 1, 2021. All other terms of the collective bargaining

agreement remained the same. In June 2021, the AFA-CWA notified the Company, as required by the Railway Labor Act, that it intends to submit proposed changes to the collective bargaining agreement covering the Company’s flight attendants. The Company and the AFA-CWA began the negotiation sessions on September 27, 2021. As of ~~June~~September 30, 2022, the Company continued to negotiate with the AFA-CWA.

In ~~May~~August 2022, the Company's aircraft maintenance technicians ("AMTs") voted to be represented by the Aircraft Mechanics Fraternal Association ("AMFA") filed an application with the NMB to represent the Company's aircraft maintenance technicians ("AMTs"). In June 2022, the Company received confirmation that the union election was authorized. The union election is currently ongoing through August 25, 2022.as their collective bargaining agent. Currently, negotiation dates have not been scheduled. As of ~~June~~September 30, 2022, the Company had approximately 600 AMTs. ~~In the event that the Company's AMTs vote to be represented by the AMFA, the Company's labor costs may increase.~~

11.Fair Value Measurements

Under ASC 820, "Fair Value Measurements and Disclosures," disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of the Company’s financial assets and liabilities.

Long-Term Debt

The estimated fair value of the Company's secured notes, term loan debt agreements and revolving credit facilities have been determined to be Level 3 as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 long-term debt. The estimated fair value of the Company's publicly and non-publicly held EETC debt agreements and the Company's convertible notes has been determined to be Level 2 as the Company utilizes quoted market prices in markets with low trading volumes to estimate the fair value of its Level 2 long-term debt.

The carrying amounts and estimated fair values of the Company's long-term debt at ~~June~~September 30, 2022 and December 31, 2021 were as follows:


		June 30, 2022				December 31, 2021				Fair Value Level Hierarchy		September 30, 2022				December 31, 2021				Fair Value Level Hierarchy
		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value				Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
		(in millions)										(in millions)
8.00% senior secured notes	8.00% senior secured notes	$	510.0	$	468.4	$	510.0	$	530.4	Level 3	8.00% senior secured notes	$	510.0	$	470.5	$	510.0	$	530.4	Level 3
Fixed-rate term loans	Fixed-rate term loans	1,159.1		1,041.4		1,223.5		1,262.6		Level 3	Fixed-rate term loans	1,127.3		1,003.1		1,223.5		1,262.6		Level 3
Unsecured term loans	Unsecured term loans	136.3		111.0		136.3		146.4		Level 3	Unsecured term loans	136.3		108.8		136.3		146.4		Level 3
2015-1 EETC Class A	2015-1 EETC Class A	289.6		271.5		300.6		311.1		Level 2	2015-1 EETC Class A	289.6		255.6		300.6		311.1		Level 2
2015-1 EETC Class B	2015-1 EETC Class B	52.0		50.3		56.0		56.4		Level 2	2015-1 EETC Class B	52.0		49.3		56.0		56.4		Level 2
2015-1 EETC Class C	2015-1 EETC Class C	69.5		67.7		75.2		74.0		Level 2	2015-1 EETC Class C	69.5		67.9		75.2		74.0		Level 2
2017-1 EETC Class AA	2017-1 EETC Class AA	193.3		175.2		200.3		203.3		Level 2	2017-1 EETC Class AA	186.3		160.4		200.3		203.3		Level 2
2017-1 EETC Class A	2017-1 EETC Class A	64.4		57.4		66.8		65.8		Level 2	2017-1 EETC Class A	62.1		51.8		66.8		65.8		Level 2
2017-1 EETC Class B	2017-1 EETC Class B	53.4		47.5		55.8		53.6		Level 2	2017-1 EETC Class B	51.7		44.4		55.8		53.6		Level 2
2017-1 EETC Class C	2017-1 EETC Class C	85.5		83.7		85.5		84.1		Level 2	2017-1 EETC Class C	85.5		84.2		85.5		84.1		Level 2
4.75% convertible notes due 2025	4.75% convertible notes due 2025	25.4		53.3		28.2		55.6		Level 2	4.75% convertible notes due 2025	25.4		43.4		28.2		55.6		Level 2
1.00% convertible notes due 2026	1.00% convertible notes due 2026	500.0		452.0		500.0		432.5		Level 2	1.00% convertible notes due 2026	500.0		420.1		500.0		432.5		Level 2

Total long-term debt	Total long-term debt	$	3,138.5	$	2,879.4	$	3,238.2	$	3,275.8		Total long-term debt	$	3,095.7	$	2,759.5	$	3,238.2	$	3,275.8

Cash and Cash Equivalents

Cash and cash equivalents at ~~June~~September 30, 2022 and December 31, 2021 are comprised of liquid money market funds and cash, and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions.

Restricted Cash

Restricted cash is comprised of cash held in an account subject to account control agreements or otherwise pledged as collateral against the Company's letters of credit and is categorized as a Level 1 instrument. As of ~~June~~September 30, 2022, the Company had $85.0 million in standby letters of credit secured by $75.0 million of restricted cash, of which ~~$26.2~~$25.7 million ~~had been drawn upon for~~were issued letters of credit. In addition, the Company had $20.4 million of restricted cash held in accounts subject to control agreements to be used for the payment of interest and fees on the 8.00% senior secured notes.

Short-term Investment Securities

Short-term investment securities at ~~June~~September 30, 2022 and December 31, 2021 ~~are~~were classified as available-for-sale and generally ~~consist~~consisted of U.S. Treasury and U.S. government agency securities with contractual maturities of 12 months or less. The Company's short-term investment securities are categorized as Level 1 instruments, as the Company uses quoted market prices in active markets when determining the fair value of these securities. For additional information, refer to Note 7, Short-term Investment Securities.

Derivative Liability

~~As a result of the settlement terms stipulated by the~~The Frontier Merger Agreement ~~as of~~and the ~~Frontier~~ Merger Agreement ~~date,~~with JetBlue include settlement terms for any conversion of the convertible notes due 2026 ~~no longer~~(as defined below) that cause the conversion option, which is an embedded derivative, not to qualify for the derivative accounting scope exception provided under ASC 815. As such, the Company ~~was required to bifurcate~~bifurcated the fair value of the conversion option of the convertible notes due 2026 as a derivative liability ~~as of the Frontier Merger Agreement date~~ with subsequent changes in fair value recorded in earnings.

As of February 5, 2022, which is the date the terms of the convertible notes were modified by the Frontier Merger Agreement, the Company recorded the fair value of the embedded derivative of $49.5 million as a derivative liability within deferred gains and other long-term liabilities and a debt discount within long-term debt and finance leases, less current maturities on its condensed consolidated balance sheets. The fair value of the derivative liability was estimated as the difference in value of the traded price of the convertible notes, including the conversion option and the value of the convertible notes in the absence of the conversion option (the debt component). The debt component was estimated using a discounted cash flow analysis with a yield calibrated to the traded price of the convertible notes. The change in fair value of the derivative

liability is recorded within interest expense on the Company's condensed consolidated statements of operations. During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded ~~$8.4~~$15.0 million and ~~$9.3~~$24.3 million, in favorable mark to market adjustments, respectively, related to the change in fair value of the derivative liability. The fair value of the conversion option did not materially change upon the termination of the Frontier Merger Agreement on July 27, 2022 and the execution of the Merger Agreement with JetBlue on July 28, 2022. The fair value of the derivative liability has been determined to be Level 2 as observable inputs were used to determine the fair value of derivative liability. For additional information, refer to Note 12, Debt and Other Obligations.

Assets and liabilities measured at gross fair value on a recurring basis are summarized below:


		Fair Value Measurements as of June 30, 2022									Fair Value Measurements as of September 30, 2022
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
		(in millions)									(in millions)
Cash and cash equivalents	Cash and cash equivalents	$	1,197.1	$	1,197.1	$	—	$	—	Cash and cash equivalents	$	953.4	$	953.4	$	—	$	—

Restricted cash	Restricted cash	95.4		95.4		—		—		Restricted cash	95.4		95.4		—		—
Short-term investment securities	Short-term investment securities	105.9		105.9		—		—		Short-term investment securities	106.3		106.3		—		—
Assets held for sale	Assets held for sale	2.5		—		—		2.5		Assets held for sale	2.5		—		—		2.5
Total assets	Total assets	$	1,400.9	$	1,398.4	$	—	$	2.5	Total assets	$	1,157.6	$	1,155.1	$	—	$	2.5

Derivative liability	Derivative liability	$	40.2	$	—	$	40.2	$	—	Derivative liability	$	25.2	$	—	$	25.2	$	—
Total liabilities	Total liabilities	$	40.2	$	—	$	40.2	$	—	Total liabilities	$	25.2	$	—	$	25.2	$	—


	Fair Value Measurements as of December 31, 2021
	Total		Level 1		Level 2		Level 3
	(in millions)
Cash and cash equivalents	$	1,333.5	$	1,333.5	$	—	$	—
Restricted cash	95.4		95.4		—		—


Short-term investment securities	106.3		106.3		—		—
Assets held for sale	2.5		—		—		2.5
Total assets	$	1,537.7	$	1,535.2	$	—	$	2.5




Total liabilities	$	—	$	—	$	—	$	—

The Company had no transfers of assets or liabilities between any of the above levels during the ~~six~~nine months ended ~~June~~September 30, 2022 and the year ended December 31, 2021.

The Company's Valuation Group, which reports to the Chief Financial Officer, is made up of individuals from the Company's Treasury and Corporate Accounting departments. The Valuation Group is responsible for the execution of the Company's valuation policies and procedures. The Valuation Group compares the results of the Company's internally developed valuation methods with counterparty reports at each balance sheet date, assesses the Company's valuation methods for accurateness and identifies any needs for modification.

12. Debt and Other Obligations

As of ~~June~~September 30, 2022, the Company had outstanding public and non-public debt instruments.

Revolving credit facility due in 2024

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had a $240.0 million revolving credit facility which was undrawn and ~~available under its revolving credit facility due 2024.~~available. Any amounts drawn on this facility are included in long-term debt and finance leases, less current maturities on the Company's condensed consolidated balance sheets. This facility matures on March 30, 2024.

Convertible senior notes due 2025

On May 12, 2020, the Company completed the public offering of $175.0 million aggregate principal amount of 4.75% convertible senior notes due 2025 ("convertible notes due 2025").

Noteholders may convert their notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the 5five consecutive business days immediately after any 5five consecutive trading day period (such 5five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; and (4) at any time from, and including, February 18, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. As of ~~June~~September 30, 2022, the notes may be converted by noteholders through ~~September 30,~~December 31, 2022.

~~Upon~~Based on the terms of the indenture, upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election. ~~Based~~However, based on the terms of the Frontier Merger Agreement executed on February 5, 2022 (the Frontier Merger Agreement date), upon conversion of any convertible notes due 2025 through the closing or termination of the Frontier Merger, the conversion value, including the principal amount, were to be paid all in shares of the Company's common stock. On July 27, 2022, the Frontier Merger Agreement was terminated; however, on July 28, 2022, the Company entered into the Merger Agreement with JetBlue. Based on the terms of the Merger Agreement with JetBlue, upon conversion of any convertible notes due 2025 through the closing or termination of the Merger Agreement with JetBlue, the conversion value, including the principal amount, will be paid all in shares of the Company's common stock. The initial conversion rate is 78.4314 shares of voting common stock per $1,000 principal amount of convertible notes (equivalent to an initial conversion price of approximately $12.75 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. On July 27, 2022, the Frontier Merger Agreement was terminated; however, on July 28, 2022, the Company entered into the Merger Agreement with JetBlue. Based on the terms of the Merger Agreement with JetBlue, upon conversion of any convertible notes due 2025 through the closing or termination of the Merger Agreement with JetBlue, the conversion value, including the principal amount, will be paid all in shares of the Company's common stock.

During the second quarter of 2022, $2.8 million of the Company's convertible notes due 2025 were converted to 217,226 shares of the Company's voting common stock. As of ~~June~~September 30, 2022, the Company had recorded $2.7 million, net of issuance costs and common stock, in additional paid-in-capital on its condensed consolidated balance sheets as of ~~June~~September 30, 2022 related to the conversion of these notes. Since the notes are currently convertible in accordance with the terms of the indenture governing such notes, the Company had $25.4 million recorded within current maturities of long-term debt and finance leases on its condensed consolidated balance sheets as of ~~June~~September 30, 2022 related to its convertible notes due 2025. As of ~~June~~September 30, 2022, the if-converted value exceeds the principal amount of the convertible notes due 2025 by $~~18.8~~21.4 million and ~~$19.5~~$20.1 million using the average stock price for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively.

Convertible senior notes due 2026

On April 30, 2021, the Company completed the public offering of $500.0 million aggregate principal amount of 1.00% convertible senior notes due 2026 ("convertible notes due 2026").

Noteholders may convert their notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the 5five consecutive business days immediately after any 5five consecutive trading day period (such 5five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls such notes for redemption; and (5) at any time from, and including, February 17, 2026 until the close of business on the second scheduled trading day immediately before the maturity date. As of ~~June~~September 30, 2022, the notes did not qualify for conversion by noteholders through ~~September 30,~~December 31, 2022.

Based on the terms of the indenture, the Company will have the right to elect to settle conversions in cash, shares of the Company’s common stock or a combination of cash and shares of common stock. ~~However, upon~~Upon conversion of any notes, the Company will pay the conversion value ~~will be paid~~ in cash up to at least the principal amount of the notes being converted. ~~Based~~However, based on the terms of the

Frontier Merger Agreement executed on February 5, 2022 (the Frontier Merger Agreement date), upon conversion of any convertible notes due 2026 through the closing or termination of the Frontier Merger, the conversion value, including the principal amount, ~~will~~were to be paid all in cash. The conversion value will be determined over an observation period consisting of 40 trading days, will be paid in cash up to at least the principal amount of the notes being converted. The initial conversion rate is 20.3791 shares of voting common stock per~~$1,000principal amount of convertible notes (equivalent to an initial conversion price of approximately$49.07per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.~~ On July 27, 2022, the Frontier Merger Agreement was terminated; however, on July 28, 2022, the Company entered into the Merger Agreement with JetBlue. Based on the terms of the Merger Agreement with JetBlue, upon conversion of any convertible notes due 2026 through the closing or termination of the Merger Agreement with JetBlue, the conversion value, including the principal amount, will be paid all in cash. The conversion value will be determined over an observation period consisting of 40 trading days. The initial conversion rate is 20.3791 shares of voting common stock per$1,000principal amount of convertible notes (equivalent to an initial conversion price of approximately$49.07per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

The notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after May 15, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price for a specified period of time. However, the Company may not redeem less than all of the outstanding notes unless at least $150.0 million aggregate principal amount of notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice.

~~As a result of the settlement terms stipulated by the~~The Frontier Merger Agreement asand the Merger Agreement with JetBlue include settlement terms for any conversion of the ~~Frontier Merger Agreement date,~~convertible notes due 2026, as described above, that cause the ~~notes no longer~~conversion option, which is an embedded derivative, not to qualify for the derivative accounting scope exception provided under ASC 815. As such, the Company ~~was required to bifurcate~~bifurcated the fair value of the conversion option of the convertible senior notes due 2026 as a derivative liability ~~as of the Frontier Merger Agreement date~~ with subsequent changes in fair value recorded in earnings.

As of February 5, 2022, which is the date the terms of the convertible notes were modified by the Frontier Merger Agreement, the Company recorded the fair value of the embedded derivative of $49.5 million as a derivative liability within deferred gains and other long-term liabilities and a debt discount within long-term debt and finance leases, less current maturities on its condensed consolidated balance sheets. The debt discount will continue to be amortized through interest expense, using the effective interest rate method, over the remaining life of the instrument. The fair value of the conversion

option did not materially change upon the termination of the Frontier Merger Agreement on July 27, 2022 and the execution of the Merger Agreement with JetBlue on July 28, 2022.

Since the notes are currently not convertible in accordance with the terms of the indenture governing such notes, the Company had ~~$456.8~~$460.7 million, net of the related unamortized debt discount of ~~$43.2~~$39.3 million, recorded within long-term debt and finance leases, less current maturities on the Company's condensed consolidated balance sheets as of ~~June~~September 30, 2022 related to its convertible notes due 2026. For additional information, refer to Note 11, Fair Value Measurements.

Long-term debt is comprised of the following:

As of As of
June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021
(in millions) (weighted-average interest rates)
8.00% senior secured notes due 2025 $ 510.0 $ 510.0 8.00 % 8.00 %
Fixed-rate loans due through 2039 (1)
1,159.1 1,223.5 3.52 % 3.52 %
Unsecured term loans due in 2031 136.3 136.3 1.00 % 1.00 %
Fixed-rate class A 2015-1 EETC due through 2028 289.6 300.6 4.10 % 4.10 %
Fixed-rate class B 2015-1 EETC due through 2024 52.0 56.0 4.45 % 4.45 %
Fixed-rate class C 2015-1 EETC due through 2023 69.5 75.2 4.93 % 4.93 %
Fixed-rate class AA 2017-1 EETC due through 2030
193.3 200.3 3.38 % 3.38 %
Fixed-rate class A 2017-1 EETC due through 2030
64.4 66.8 3.65 % 3.65 %
Fixed-rate class B 2017-1 EETC due through 2026
53.4 55.8 3.80 % 3.80 %
Fixed-rate class C 2017-1 EETC due through 2023
85.5 85.5 5.11 % 5.11 %
Convertible notes due 2025 25.4 28.2 4.75 % 4.75 %
Convertible notes due 2026 500.0 500.0 1.00 % 1.00 %
Long-term debt $ 3,138.5 $ 3,238.2
Less current maturities 350.9 208.2
Less unamortized discounts, net
92.1 54.9
Total $ 2,695.5 $ 2,975.1


	As of				As of
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
	(in millions)				(weighted-average interest rates)
8.00% senior secured notes due 2025	$	510.0	$	510.0	8.00	%	8.00	%
Fixed-rate loans due through 2039 (1)	1,127.3		1,223.5		3.52	%	3.52	%
Unsecured term loans due in 2031	136.3		136.3		1.00	%	1.00	%
Fixed-rate class A 2015-1 EETC due through 2028	289.6		300.6		4.10	%	4.10	%
Fixed-rate class B 2015-1 EETC due through 2024	52.0		56.0		4.45	%	4.45	%
Fixed-rate class C 2015-1 EETC due through 2023	69.5		75.2		4.93	%	4.93	%
Fixed-rate class AA 2017-1 EETC due through 2030	186.3		200.3		3.38	%	3.38	%
Fixed-rate class A 2017-1 EETC due through 2030	62.1		66.8		3.65	%	3.65	%
Fixed-rate class B 2017-1 EETC due through 2026	51.7		55.8		3.80	%	3.80	%
Fixed-rate class C 2017-1 EETC due through 2023	85.5		85.5		5.11	%	5.11	%
Convertible notes due 2025	25.4		28.2		4.75	%	4.75	%
Convertible notes due 2026	500.0		500.0		1.00	%	1.00	%


Long-term debt	$	3,095.7	$	3,238.2
Less current maturities	353.4		208.2
Less unamortized discounts, net	84.7		54.9
Total	$	2,657.6	$	2,975.1

(1) Includes obligations related to 1one aircraft recorded as a failed sale leaseback. Refer to Note 9, Leases for additional information.

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company made scheduled principal payments of ~~$52.4~~$43.0 million and ~~$96.8~~$139.8 million, respectively, on its outstanding debt obligations. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company made scheduled principal payments of ~~$234.8~~$45.6 million and ~~$370.7~~$416.3 million, respectively, on its outstanding debt obligations.

At ~~June~~September 30, 2022, long-term debt principal payments for the next five years and thereafter ~~are~~were as follows:


		June 30, 2022			September 30, 2022
		(in millions)			(in millions)
remainder of 2022	remainder of 2022	$	96.2	remainder of 2022	$	53.4
2023	2023	336.6		2023	336.6
2024	2024	222.1		2024	222.1
2025	2025	723.8		2025	723.8
2026	2026	731.1		2026	731.1
2027 and beyond	2027 and beyond	1,028.7		2027 and beyond	1,028.7
Total debt principal payments	Total debt principal payments	$	3,138.5	Total debt principal payments	$	3,095.7

Interest Expense

Interest expense related to long-term debt and finance leases consists of the following:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
(in thousands)
8.00% senior secured notes (1)
$ 10,461 $ 13,541 20,921 $ 30,975
Fixed-rate term loans 10,485 10,746 21,169 21,649
Unsecured term loans 340 282 676 481
Class A 2015-1 EETC 2,954 3,178 6,001 6,453
Class B 2015-1 EETC 575 664 1,191 1,369
Class C 2015-1 EETC 856 997 1,773 2,053
Class AA 2017-1 EETC 1,640 1,759 3,278 3,514
Class A 2017-1 EETC 591 634 1,182 1,267
Class B 2017-1 EETC 510 556 1,022 1,113
Class C 2017-1 EETC 1,092 1,092 2,171 2,171
Convertible notes (2)
(3,024) 1,749 199 3,827
Revolving credit facilities — 562 — 1,733
Finance leases 16 24 34 48
Commitment and other fees 418 604 955 1,032
Amortization of deferred financing costs 3,210 3,274 7,432 6,783
Total $ 30,124 $ 39,662 $ 68,004 $ 84,468


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
8.00% senior secured notes (1)	$	10,461	$	10,461	31,382		$	41,436
Fixed-rate term loans	10,273		10,522		31,442		32,171
Unsecured term loans	344		344		1,020		824
Class A 2015-1 EETC	2,985		3,212		8,986		9,665
Class B 2015-1 EETC	581		671		1,772		2,039
Class C 2015-1 EETC	856		997		2,629		3,051
Class AA 2017-1 EETC	1,615		1,734		4,893		5,248
Class A 2017-1 EETC	582		625		1,764		1,892
Class B 2017-1 EETC	503		546		1,525		1,659
Class C 2017-1 EETC	1,104		1,104		3,275		3,275
Convertible notes (2)	(9,641)		1,585		(9,442)		5,412
Revolving credit facilities	—		—		—		1,733
Finance leases	13		23		47		72
Commitment and other fees	830		612		1,785		1,644
Amortization of deferred financing costs	3,202		3,273		10,634		10,056

Total	$	23,708	$	35,709	$	91,712	$	120,177

(1) ~~Includes $0.3 million and $0.5 million of accretion and $10.2 million and $20.4 million of interest expense for the three and six months ended June 30, 2022, respectively.~~ Includes $0.3 million and $0.8 million of accretion and ~~$13.2~~$10.2 million and ~~$30.2~~$30.6 million of interest expense for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. Includes $0.3 million and $1.0 million of accretion and $10.2 million and $40.4 million of interest expense for the three and nine months ended September 30, 2021, respectively.

(2) Includes $3.8 million and ~~$6.3~~$10.2 million of amortization of the discount for the convertible notes due 2026, $1.6 million and ~~$3.2~~$4.7 million of interest expense for the convertible notes due 2025 and 2026 offset by ~~$8.4~~$15.0 million and ~~$9.3~~$24.3 million of favorable mark to market adjustments for the convertible notes due 2026 for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. Includes ~~$1.7~~$1.6 million and ~~$3.8~~$5.4 million of interest expense for the convertible notes due 2025 and 2026 for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We evaluate our financial performance utilizing various accounting principles generally accepted in the United States of America (“GAAP”) and non-GAAP financial measures, including Adjusted CASM and Adjusted CASM ex-fuel. These non-GAAP financial measures are provided as supplemental information to the financial information presented in this quarterly report that is calculated and presented in accordance with GAAP and these non-GAAP financial measures are presented because management believes that they supplement or enhance management’s, analysts’ and investors’ overall understanding of our underlying financial performance and trends and facilitate comparisons among current, past and future periods.

Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in this quarterly report and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in the method of calculation and in the items being adjusted. We encourage investors to review our financial statements and other filings with the Securities and Exchange Commission in their entirety and not to rely on any single financial measure.

The information below provides an explanation of certain adjustments reflected in the non-GAAP financial measures and shows a reconciliation of non-GAAP financial measures reported in this quarterly report to the most directly comparable GAAP financial measures. Within the financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Per unit amounts presented are calculated from the underlying amounts.

Operating expenses per available seat mile (“CASM”) is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. We exclude loss on disposal of assets, special charges (credits), federal excise tax recovery adjustments and accelerated depreciation to determine Adjusted CASM. We believe that also excluding aircraft fuel and related taxes ("Adjusted CASM ex-fuel") from certain measures is useful to investors because it provides an additional measure of management’s performance excluding the effects of a significant cost item over which management has limited influence and increases comparability with other airlines that also provide a similar metric. In prior periods, we excluded supplemental rent adjustments related to the modification of aircraft or engine leases from Adjusted CASM and Adjusted CASM ex-fuel. However, we no longer exclude supplemental rent adjustments from our non-GAAP measures. Therefore, 2021 non-GAAP measures have been revised to reflect this change and no longer exclude previously reported supplemental rent adjustments.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical factors are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in this report and in Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

Spirit Airlines, headquartered in Miramar, Florida, offers affordable travel to value-conscious customers. Our all-Airbus fleet is one of the youngest and most fuel efficient in the United States. We serve destinations throughout the United States, Latin America and the Caribbean, and are dedicated to giving back and improving those communities. Our stock trades under the symbol "SAVE" on the New York Stock Exchange ("NYSE").

We focus on value-conscious travelers who pay for their own travel, and our business model is designed to deliver what our Guests want: low fares and a great experience. We compete based on total price. We allow our Guests 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 on average than other airlines. By offering Guests unbundled base fares, we give them the power to save by paying only for the À La Smarte® options they choose, such as checked and carry-on bags and advance seat assignments. We record revenue related to these options as non-fare passenger revenue, which is recorded within passenger revenues in our statement of operations.

We use low fares to address underserved markets, which helps us to increase passenger volume, load factors and non-ticket revenue. We also have high-density seating configurations on our fuel-efficient, all-Airbus fleet and a simplified onboard product designed to lower costs. High passenger volumes and load factors help us sell more ancillary products and services, which in turn allows us to reduce our fares even further.

We are committed to delivering the best value in the sky while providing an exceptional Guest experience. Our optimized mobile-friendly website makes booking easier. Our updated mobile app allows Guests to search for the lowest fares, book and check in while on the go, and our airport kiosks and self-bag tagging help our Guests move through the airport more quickly.

Comparative Operating Statistics:

The following tables set forth our operating statistics for the three and ~~six~~nine month periods ended ~~June~~September 30, 2022 and 2021:


		Three Months Ended June 30,				Percent Change			Three Months Ended September 30,				Percent Change
		2022		2021					2022		2021
Operating Statistics (unaudited) (A):	Operating Statistics (unaudited) (A):							Operating Statistics (unaudited) (A):
Average aircraft	Average aircraft	177.6		159.9		11.1	%	Average aircraft	181.4		166.6		8.9	%
Aircraft at end of period	Aircraft at end of period	180		164		9.8	%	Aircraft at end of period	184		168		9.5	%

Average daily aircraft utilization (hours)	Average daily aircraft utilization (hours)	10.7		9.9		8.1	%	Average daily aircraft utilization (hours)	10.6		10.4		1.9	%
Average stage length (miles)	Average stage length (miles)	1,022		1,012		1.0	%	Average stage length (miles)	989		1,010		(2.1)	%

Departures	Departures	63,148		53,984		17.0	%	Departures	66,745		59,419		12.3	%
Passenger flight segments (PFSs) (thousands)	Passenger flight segments (PFSs) (thousands)	9,719		8,385		15.9	%	Passenger flight segments (PFSs) (thousands)	9,980		8,319		20.0	%
Revenue passenger miles (RPMs) (thousands)	Revenue passenger miles (RPMs) (thousands)	10,192,686		8,635,827		18.0	%	Revenue passenger miles (RPMs) (thousands)	10,104,170		8,579,489		17.8	%
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	11,846,547		10,226,746		15.8	%	Available seat miles (ASMs) (thousands)	12,131,033		11,059,710		9.7	%
Load factor (%)	Load factor (%)	86.0	%	84.4	%	1.6 pts		Load factor (%)	83.3	%	77.6	%	5.7 pts
Fare revenue per passenger flight segment ($)	Fare revenue per passenger flight segment ($)	72.41		44.09		64.2	%	Fare revenue per passenger flight segment ($)	67.52		50.61		33.4	%
Non-ticket revenue per passenger flight segment ($)	Non-ticket revenue per passenger flight segment ($)	68.20		58.39		16.8	%	Non-ticket revenue per passenger flight segment ($)	67.07		60.30		11.2	%
Total revenue per passenger flight segment ($)	Total revenue per passenger flight segment ($)	140.61		102.48		37.2	%	Total revenue per passenger flight segment ($)	134.59		110.91		21.4	%
Average yield (cents)	Average yield (cents)	13.41		9.95		34.8	%	Average yield (cents)	13.29		10.75		23.6	%
TRASM (cents)	TRASM (cents)	11.54		8.40		37.4	%	TRASM (cents)	11.07		8.34		32.7	%
CASM (cents)	CASM (cents)	11.92		7.49		59.1	%	CASM (cents)	11.37		8.22		38.3	%
Adjusted CASM (cents)	Adjusted CASM (cents)	11.68		8.62		35.5	%	Adjusted CASM (cents)	10.98		8.99		22.1	%
Adjusted CASM ex-fuel (cents)	Adjusted CASM ex-fuel (cents)	6.96		6.52		6.7	%	Adjusted CASM ex-fuel (cents)	6.79		6.64		2.3	%
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	129,972		110,202		17.9	%	Fuel gallons consumed (thousands)	133,140		121,126		9.9	%
Average economic fuel cost per gallon ($)	Average economic fuel cost per gallon ($)	4.30		1.95		120.5	%	Average economic fuel cost per gallon ($)	3.82		2.14		78.5	%

(A) See "Glossary of Airline Terms" elsewhere in this quarterly report for definitions used in this table.


		Six Months Ended June 30,				Percent Change			Nine Months Ended September 30,				Percent Change
		2022		2021					2022		2021
Operating Statistics (unaudited) (A):	Operating Statistics (unaudited) (A):							Operating Statistics (unaudited) (A):
Average aircraft	Average aircraft	176.2		158.6		11.1	%	Average aircraft	177.9		161.3		10.3	%
Aircraft at end of period	Aircraft at end of period	180		164		9.8	%	Aircraft at end of period	184		168		9.5	%

Average daily aircraft utilization (hours)	Average daily aircraft utilization (hours)	10.7		8.8		21.6	%	Average daily aircraft utilization (hours)	10.7		9.3		15.1	%
Average stage length (miles)	Average stage length (miles)	1,034		1,024		1.0	%	Average stage length (miles)	1,019		1,018		0.1	%

Departures	Departures	124,106		93,986		32.0	%	Departures	190,851		153,405		24.4	%
Passenger flight segments (PFSs) (thousands)	Passenger flight segments (PFSs) (thousands)	18,224		13,858		31.5	%	Passenger flight segments (PFSs) (thousands)	28,204		22,177		27.2	%
Revenue passenger miles (RPMs) (thousands)	Revenue passenger miles (RPMs) (thousands)	19,242,720		14,383,382		33.8	%	Revenue passenger miles (RPMs) (thousands)	29,346,890		22,962,872		27.8	%
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	23,565,443		18,202,904		29.5	%	Available seat miles (ASMs) (thousands)	35,696,476		29,262,614		22.0	%
Load factor (%)	Load factor (%)	81.7	%	79.0	%	2.7 pts		Load factor (%)	82.2	%	78.5	%	3.7 pts
Fare revenue per passenger flight segment ($)	Fare revenue per passenger flight segment ($)	61.58		39.25		56.9	%	Fare revenue per passenger flight segment ($)	63.68		43.51		46.4	%
Non-ticket revenue per passenger flight segment ($)	Non-ticket revenue per passenger flight segment ($)	66.49		56.04		18.6	%	Non-ticket revenue per passenger flight segment ($)	66.70		57.64		15.7	%
Total revenue per passenger flight segment ($)	Total revenue per passenger flight segment ($)	128.07		95.29		34.4	%	Total revenue per passenger flight segment ($)	130.38		101.15		28.9	%
Average yield (cents)	Average yield (cents)	12.13		9.18		32.1	%	Average yield (cents)	12.53		9.77		28.2	%
TRASM (cents)	TRASM (cents)	9.90		7.25		36.6	%	TRASM (cents)	10.30		7.67		34.3	%
CASM (cents)	CASM (cents)	10.99		7.31		50.3	%	CASM (cents)	11.12		7.65		45.4	%
Adjusted CASM (cents)	Adjusted CASM (cents)	10.76		8.90		20.9	%	Adjusted CASM (cents)	10.83		8.93		21.3	%
Adjusted CASM ex-fuel (cents)	Adjusted CASM ex-fuel (cents)	6.82		6.93		(1.6)	%	Adjusted CASM ex-fuel (cents)	6.81		6.82		(0.1)	%
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	254,888		190,748		33.6	%	Fuel gallons consumed (thousands)	388,027		311,874		24.4	%
Average economic fuel cost per gallon ($)	Average economic fuel cost per gallon ($)	3.64		1.88		93.6	%	Average economic fuel cost per gallon ($)	3.70		1.98		86.9	%

(A) See "Glossary of Airline Terms" elsewhere in this quarterly report for definitions used in this table.

Executive Summary

Termination of Frontier Merger

Announcement of JetBlue Merger

On July 28, 2022, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with JetBlue Airways Corporation, a Delaware corporation (“JetBlue”), and Sundown Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary of JetBlue (“Merger Sub”), pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving entity (the “Merger”). As a result of the Merger, each existing share of Spirit's common stock (except for dissenting shares, treasury stock, and shares of Spirit's common stock owned by JetBlue, Merger Sub or any of their respective wholly owned subsidiaries), will be converted into the right to receive an amount in cash per share, without interest, equal to (such amount, the “Merger Consideration”) (i) $33.50 minus (ii) (A) $2.50 (the “Approval Prepayment Amount”), to the extent paid (the “Approval Prepayment”) upon the adoption by Spirit stockholders of the Merger Agreement (or, in the event that the closing of the Merger (the “Closing”) occurs after the record date for the prepayment of, but before the payment date of, such Approval Prepayment Amount, to the extent payable after the Closing), and (B) an additional per share prepayment amount calculated as the product of $0.10 and the number of additional

prepayments paid (or, in the event the Closing occurs after the record date of, but before the payment date of any such additional prepayment, to the extent payable after the Closing), not to exceed $1.15 per share of Spirit common stock, by JetBlue to Spirit stockholders in accordance with the Merger Agreement after December 31, 2022 (each such payment is referred to as an “Additional Prepayment” and such $0.10 amount is referred to as the “Additional Prepayment Amount”).

JetBlue will pay or cause to be paid the Approval Prepayment Amount to Spirit stockholders as of the record date established by Spirit for the special meeting to approve the Merger Agreement within five business days following such Spirit stockholder approval. Thereafter, on or prior to the last business day of each month beginning after December 31, 2022 until the earlier of the Closing or termination of the Merger Agreement, JetBlue will also pay or cause to be paid the Additional Prepayment Amount to Spirit stockholders as of a record date not more than 5 business days prior to the last business day of such month. We expect payments made from JetBlue to Spirit stockholders will not impact our results of operations or cash flows. Under the terms of the Merger Agreement, JetBlue reimbursed Spirit for the $25.0 million Frontier Expenses discussed above.

On October 19, 2022, Spirit’s stockholders approved the Merger Agreement at a special meeting of stockholders. The record date for both Spirit's special meeting and the Approval Prepayment is September 12, 2022. Therefore, all Spirit stockholders of record as of September 12, 2022 are entitled to receive the Approval Prepayment in accordance with the Merger Agreement. On October 26, 2022, JetBlue paid the Spirit stockholders the Approval Prepayment Amount of $2.50 per share.

Completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including, among other things: (1) approval of the transactions by Spirit’s ~~stockholders;~~stockholders, which was received on October 19, 2022; (2) receipt of applicable regulatory approvals, including approvals from the U.S. Federal Communications Commission, the U.S. Federal Aviation Administration and the U.S. Department of Transportation and the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other competition laws, and other required regulatory approvals; (3) the absence of any law or order prohibiting the consummation of the transactions; and (4) the absence of any material adverse effect (as defined in the Merger Agreement) on Spirit.

Spirit, JetBlue and Merger Sub each make certain customary representations, warranties and covenants, as applicable, in the Merger Agreement.

Summary of Results

For the ~~second~~third quarter of 2022, we had a negative operating margin of ~~3.3%~~2.7%, a decrease of ~~14.1~~4.2 percentage points compared to an operating margin of ~~10.8%~~1.5% in the prior year period. We generated a pre-tax loss of ~~$67.5~~$48.9 million and a net loss of ~~$52.4~~$36.4 million on operating revenues of ~~$1,366.6~~$1,343.2 million. For the ~~second~~third quarter of 2021, we generated a pre-tax loss of ~~$273.3~~$17.0 million and a net ~~loss~~income of ~~$287.9~~$14.8 million on operating revenues of ~~$859.3~~$922.6 million.

Our Adjusted CASM ex-fuel for the ~~second~~third quarter of 2022 was ~~6.96~~6.79 cents compared to ~~6.52~~6.64 cents in the same period in the prior year. The increase on a per-ASM basis was primarily due to increases in ~~reaccommodation~~landing fees and other rents expense, ground handling expense, salaries, wages and benefits expense and ~~ground handling~~distribution expense, period over period. On a per-ASM basis, these increases were partially offset by ~~decreases~~the decrease in ~~primarily fixed operating costs such as depreciation and amortization~~reaccommodation expense, ~~and aircraft rent expense. Improved air travel demand, as compared to the prior year period, drove an increase in ASMs of 15.8%,~~ period over period.

Due to the impacts of the pandemic on the demand for airline travel, beginning in 2020, we paused hiring across all work groups, including pilots and flight attendants, for nearly a year. During this time, we continued to take scheduled delivery of aircraft per our contractual purchase commitments with Airbus. In early 2021, as travel demand improved, we re-launched our recruiting, hiring and training initiatives. The pause in hiring during 2020 through early 2021, as well as staffing and

operational challenges that have affected the airline industry overall, have restricted our ability to both optimize our network and operate our fleet at full utilization. As a result, on a per-ASM basis, we have experienced higher costs since early 2020 and expect this trend to continue until we are able to reach full fleet utilization.

As of ~~June~~September 30, 2022, we had ~~180~~184 Airbus A320-family aircraft in our fleet comprised of 31 A319s, 64 A320s, 30 A321s, and 5559 A320neos. With the scheduled delivery of 1713 aircraft during the remainder of 2022, we expect to end 2022 with 197 aircraft in our fleet.

Comparison of three months ended ~~June~~September 30, 2022 to three months ended ~~June~~September 30, 2021

Operating Revenues

Operating revenues increased ~~$507.3~~$420.5 million, or ~~59.0%~~45.6%, to ~~$1,366.6~~$1,343.2 million for the ~~second~~third quarter of 2022, as compared to the ~~second~~third quarter of 2021, primarily due to an increase in average yield of ~~34.8%~~23.6%, an increase in traffic of ~~18.0%~~17.8% and an increase in load factor of ~~1.6~~5.7 pts, year over ~~year, driven by increased air travel demand as compared to prior year period.~~year.

Total revenue per passenger flight segment increased ~~37.2%~~21.4%, year over year. The increase in total revenue per passenger flight segment was primarily driven by a ~~34.8%~~23.6% increase in average yield, period over period. Fare revenue per passenger flight segment increased ~~64.2%~~33.4% and non-ticket revenue per passenger flight segment increased ~~16.8%~~11.2%. The increase in non-ticket revenue per passenger flight segment was primarily attributable to increases in bag revenue, passenger usage fee revenue, change fee revenue, ~~seat~~boost-it revenue and ~~boost-it and bundle-it~~seat revenue per passenger flight segment, as compared to the prior year.

Operating Expenses

Operating expenses increased ~~$645.9~~$470.9 million, or ~~84.3%~~51.8%, to ~~$1,412.0~~$1,379.6 million for the ~~second~~third quarter of 2022 compared to ~~$766.1~~$908.6 million for the ~~second~~third quarter of 2021, primarily due to an increase in aircraft fuel expense, period over period. ~~We also had an increase in operations as reflected by an 18.0% increase in traffic and 15.8% increase in capacity.~~ In addition, we had ~~$18.0~~$38.4 million in special charges in the ~~second~~third quarter of 2022 compared to ~~$115.0~~$85.8 million in special credits during the ~~second~~third quarter of 2021. For additional information, refer to "Notes to Condensed Consolidated Financial Statements—5. Special Charges (Credits)." We also had an increase in operations as reflected by an 17.8% increase in traffic and 9.7% increase in capacity.

Aircraft fuel expense includes into-plane fuel expense (defined below) and realized and unrealized gains and losses associated with our fuel derivative contracts, if any. Into-plane fuel expense is defined as the price that we generally pay at the airport, including taxes and fees. Into-plane fuel prices are affected by the global oil market, refining costs, taxes and fees, which can vary by region in the United States and other countries where we operate. Into-plane fuel expense approximates cash paid to the supplier and does not reflect the effect of any fuel derivatives. We had no activity related to fuel derivative instruments during the three months ended ~~June~~September 30, 2022 and 2021.

Aircraft fuel expense increased by ~~$343.8~~$248.9 million, or ~~160.0%~~95.9%, from ~~$214.8~~$259.6 million in the ~~second~~third quarter of 2021 to ~~$558.6~~$508.5 million in the ~~second~~third quarter of 2022. This ~~higher~~increase in fuel expense, period over period, was due to a ~~120.5%~~78.5% increase in average economic fuel cost per gallon and a ~~17.9%~~9.9% increase in fuel gallons consumed.

The elements of the changes in aircraft fuel expense are illustrated in the following table:


		Three Months Ended June 30,							Three Months Ended September 30,
		2022		2021					2022		2021
		(in thousands, except per-gallon amounts)				Percent Change			(in thousands, except per-gallon amounts)				Percent Change
Fuel gallons consumed	Fuel gallons consumed	129,972		110,202		17.9	%	Fuel gallons consumed	133,140		121,126		9.9	%
Into-plane fuel cost per gallon	Into-plane fuel cost per gallon	$	4.30	$	1.95	120.5	%	Into-plane fuel cost per gallon	$	3.82	$	2.14	78.5	%

Aircraft fuel expense (per condensed consolidated statements of operations)	Aircraft fuel expense (per condensed consolidated statements of operations)	$	558,633	$	214,825	160.0	%	Aircraft fuel expense (per condensed consolidated statements of operations)	$	508,496	$	259,618	95.9	%

Gulf Coast Jet indexed fuel is the basis for a substantial majority of our fuel consumption and is impacted by both the price of crude oil as well as increases or decreases in refining margins associated with the conversion of crude oil to jet fuel. The into-plane fuel cost per gallon increase of ~~120.5%~~78.5% was primarily a result of an increase in jet fuel prices.

We measure our operating cost performance on a per-ASM basis, since one ASM is the unit of production of an airline’s capacity. The following table presents our cost per-ASM, or unit cost, for the three months ended ~~June~~September 30, 2022 and 2021, followed by explanations of the material changes on a dollar basis and/or unit cost basis:


		Three Months Ended June 30,					Dollar Change				Percent Change				Cost per ASM					Per-ASM Change	Percent Change			Three Months Ended September 30,								Dollar Change				Percent Change				Cost per ASM					Per-ASM Change		Percent Change
						Three Months Ended June 30,												Three Months Ended September 30,
				2022									2021				2022						2021					2022										2021					2022						2021
		(in thousands)														(in cents)										(in thousands)															(in cents)
Salaries, wages, and benefits	Salaries, wages, and benefits	$	308,634	$	257,236				$	51,398			20.0	%		2.61			2.52			0.09					3.6	%	Salaries, wages, and benefits	$	311,957			$	277,372			$	34,585		12.5	%		2.57		2.51			0.06	2.4	%
Aircraft fuel	Aircraft fuel	558,633		214,825			343,808				160.0	%			4.72		2.10			2.62	124.8	%	Aircraft fuel	508,496				259,618				248,878				95.9	%			4.19			2.35		1.84		78.3	%
Landing fees and other rents	Landing fees and other rents	92,021		81,497			10,524				12.9	%			0.78		0.80			(0.02)	(2.5)	%	Landing fees and other rents	95,174				77,703				17,471				22.5	%			0.78			0.70		0.08		11.4	%
Depreciation and amortization	Depreciation and amortization	76,469		73,703			2,766				3.8	%			0.65		0.72			(0.07)	(9.7)	%	Depreciation and amortization	78,184				74,260				3,924				5.3	%			0.64			0.67		(0.03)		(4.5)	%
Aircraft rent	Aircraft rent	68,632		64,641			3,991				6.2	%			0.58		0.63			(0.05)	(7.9)	%	Aircraft rent	75,332				65,873				9,459				14.4	%			0.62			0.60		0.02		3.3	%
Maintenance, materials and repairs	Maintenance, materials and repairs	45,407		39,639			5,768				14.6	%			0.38		0.39			(0.01)	(2.6)	%	Maintenance, materials and repairs	45,126				41,183				3,943				9.6	%			0.37			0.37		—		—	%
Distribution	Distribution	48,724		35,263			13,461				38.2	%			0.41		0.34			0.07	20.6	%	Distribution	47,385				36,085				11,300				31.3	%			0.39			0.33		0.06		18.2	%
Loss on disposal of assets	Loss on disposal of assets	10,636		189			10,447				NM				0.09		—			0.09	NM		Loss on disposal of assets	9,374				532				8,842				NM				0.08			—		0.08		NM
Special charges (credits)	Special charges (credits)	18,004		(115,002)			133,006				NM				0.15		(1.12)			1.27	NM		Special charges (credits)	38,359				(85,775)				124,134				NM				0.32			(0.78)		1.10		NM
Other operating	Other operating	184,813		114,107			70,706				62.0	%			1.56		1.12			0.44	39.3	%	Other operating	170,182				161,785				8,397				5.2	%			1.40			1.46		(0.06)		(4.1)	%
Total operating expenses	Total operating expenses	$	1,411,973	$	766,098		$	645,875			84.3	%			11.92		7.49			4.43	59.1	%	Total operating expenses	$	1,379,569			$	908,636			$	470,933			51.8	%			11.37			8.22		3.15		38.3	%

Adjusted CASM (1)	Adjusted CASM (1)														11.68		8.62			3.06	35.5	%	Adjusted CASM (1)																	10.98			8.99		1.99		22.1	%
Adjusted CASM ex-fuel (2)	Adjusted CASM ex-fuel (2)														6.96		6.52			0.44	6.7	%	Adjusted CASM ex-fuel (2)																	6.79			6.64		0.15		2.3	%

(1)Reconciliation of CASM to Adjusted CASM:


		Three Months Ended June 30,							Three Months Ended September 30,
		2022			2021				2022			2021
		(in millions)		Per ASM	(in millions)		Per ASM		(in millions)		Per ASM	(in millions)		Per ASM
CASM (cents)	CASM (cents)			11.92			7.49	CASM (cents)			11.37			8.22

Loss on disposal of assets	Loss on disposal of assets	$	10.6	0.09	$	0.2	—	Loss on disposal of assets	$	9.4	0.08	$	0.5	—
Special charges (credits)	Special charges (credits)	18.0		0.15	(115.0)		(1.12)	Special charges (credits)	38.4		0.32	(85.8)		(0.78)

Federal excise tax recovery		—		—	(2.2)		(0.02)
Accelerated depreciation		—		—	1.8		0.02

Adjusted CASM (cents)	Adjusted CASM (cents)			11.68			8.62	Adjusted CASM (cents)			10.98			8.99

(2)Excludes aircraft fuel expense, loss on disposal of assets and special charges (credits), amounts related to out-of-period interrupted trip expense credits recognized in connection with Federal Excise Tax recovery and accelerated depreciation on aircraft seats related to the retrofit of 36 aircraft with new Acro6 seats completed in 2021..

Our Adjusted CASM ex-fuel for the ~~second~~third quarter of 2022 was ~~6.96~~6.79 cents, compared to ~~6.52~~6.64 cents in the same period in the prior year. The increase on a per-ASM basis was primarily due to increases in ~~reaccommodation~~landing fees and other rents expense, ground handling expense, salaries, wages and benefits expense and ~~ground handling~~distribution expense, period over period. On a per-ASM basis, these increases were partially offset by ~~decreases~~the decrease in ~~primarily fixed operating costs such as depreciation and amortization~~reaccommodation expense, ~~and aircraft rent expense. Improved air travel demand, as compared to the prior year period, drove an increase in ASMs of 15.8%,~~ period over period.

Salaries, wages and benefits for the ~~second~~third quarter of 2022 increased ~~$51.4~~$34.6 million, or ~~20.0%~~12.5%, as compared to the ~~second~~third quarter of 2021. This increase on a dollar and per-ASM basis was primarily driven by higher salaries ~~crew overtime~~ and ~~401(k)~~health insurance expense, period over period. The increase in salaries ~~and crew overtime~~ was mainly driven by ~~a 15.8% increase in our pilot~~increased headcount and ~~flight attendant workforce,~~pay rates, period over period, as well as due to an increase in operations as compared to the prior year period. The increase in ~~401(k)~~health insurance expense was mainly driven by higher ~~pay to our pilot workforce driven by an increase in operations as well as higher average pay rates and 401(k) employer contribution rates to our pilots~~volume of claims as compared to the prior year period.

Landing fees and other rents for the ~~second~~third quarter of 2022 increased ~~$10.5~~$17.5 million, or ~~12.9%~~22.5%, as compared to the ~~second~~third quarter of 2021. On a dollar and per-ASM basis, landing fees and other rents expense primarily increased as a result of an increase in facility rent and station baggage rent driven by increased operations, higher rent rates and the addition of new stations as well as new gates at our existing stations, period over period. A portion of our facility rent and baggage rent is variable in nature and varies based on factors such as the number of ~~departures.~~departures and passengers. As compared to the prior year period, departures increased by ~~17.0%. On a per-ASM basis, landing fees~~12.3% and ~~other rents decreased, period over period,~~

~~primarily due to a lower average rate per landing based on the location and volume of where we operated, partially offset~~passenger flight segments increased by ~~an increase in facility rent.~~20.0%.

Depreciation and amortization for the ~~second~~third quarter of 2022 increased by ~~$2.8~~$3.9 million, or ~~3.8%~~5.3%, as compared to the prior year period. The increase in depreciation and amortization expense on a dollar basis was primarily driven by an increase in computer software, spare rotables and ~~hardware.~~capitalized heavy maintenance events. On a per-ASM basis, depreciation and amortization expense decreased due to a change in the composition of our aircraft fleet between purchased aircraft (for which depreciation expense is recorded under depreciation and amortization) and leased aircraft (for which rent expense is recorded

under aircraft rent). Since the prior year period, we have taken delivery of 15 new leased aircraft, which increased capacity but had no effect on depreciation expense.

We account for heavy maintenance under the deferral method. Under the deferral method, the cost of heavy maintenance is capitalized and amortized as a component of depreciation and amortization expense in the statement of operations until the earlier of the next heavy maintenance event or the end of the lease term. The amortization of heavy maintenance costs was ~~$22.5~~$23.4 million and ~~$22.6~~$22.7 million for the ~~second~~third quarters of 2022 and 2021, respectively. The amortization of heavy maintenance costs is driven by the timing and number of maintenance events. As our fleet continues to grow and age, we generally expect that the amount of deferred heavy maintenance events will increase and will result in an increase in the amortization of those costs. If heavy maintenance events were amortized within maintenance, materials and repairs expense in the condensed consolidated statements of operations, our maintenance, materials and repairs expense would have been ~~$67.9~~$68.5 million and ~~$62.2~~$63.9 million for the ~~second~~third quarter of 2022 and 2021, respectively.

Aircraft rent expense for the ~~second~~third quarter of 2022 increased by ~~$4.0~~$9.5 million, or ~~6.2%~~14.4%, as compared to the ~~second~~third quarter of 2021. This increase in aircraft rent expense on a dollar basis was primarily due to an increase in the number of aircraft financed under operating leases throughout the current period, as compared to the prior year period. Since the ~~second~~third quarter of 2021, we have acquired 15 new aircraft financed under operating leases. The increase in aircraft rent was partially offset by a decrease in supplemental rent, period over period. The decrease in supplemental rent is driven by the accrual of lease return costs in the prior year period related to the purchase of two A319 aircraft off lease made during the second quarter of 2021, partially offset by the accrual of lease return costs during the second quarter of 2022 related to our short-term spare engines. The decrease on a per-ASM basis was primarily due to ~~the decrease in supplemental rent noted above, partially offset by the~~an increase in ~~rent expense related to~~ the ~~increase~~number of aircraft in ~~aircraft financed under operating leases throughout the current~~our fleet that are leased, period over period.

Maintenance, materials and repairs expense for the ~~second~~third quarter of 2022 increased by ~~$5.8~~$3.9 million, or ~~14.6%~~9.6%, as compared to the ~~second~~third quarter of 2021. On a ~~per~~ dollar basis, the increase in maintenance, materials and repairs expense was mainly due to a higher volume of aircraft and ~~rotable~~ maintenance events as ~~a result~~well as the aging of ~~an 8.1% increase in average daily~~ aircraft ~~utilization in the current period~~ as compared to the prior year period. On a per-ASM basis, maintenance, materials and repairs expense remained ~~relatively~~ stable, period over period.

Distribution costs increased by ~~$13.5~~$11.3 million, or ~~38.2%~~31.3%, in the ~~second~~third quarter of 2022 as compared to the ~~second~~third quarter of 2021. The increase on a dollar ~~and per-ASM~~ basis was primarily due to increased sales ~~volume, which impacts our variable~~volume. On a per-ASM basis, distribution costs ~~such as~~increased primarily due to higher average fare resulting in an increase in credit card ~~fees.~~fees year over year.

Loss on disposal of assets for the three months ended ~~June~~September 30, 2022 primarily consisted of ~~$10.2~~$9.4 million related to the loss on four aircraft sale leaseback transactions completed during the ~~second~~third quarter of 2022. Loss on disposal of assets for the three months ended ~~June~~September 30, 2021 primarily consisted of ~~$0.2~~$0.5 million related to the loss on ~~two~~one aircraft sale leaseback ~~transactions~~transaction completed during the ~~second~~third quarter of 2021.

Special charges for the three months ended ~~June~~September 30, 2022 consisted of ~~$10.4~~$17.7 million in legal, advisory and other fees related to the former Frontier Merger Agreement, ~~with Frontier and~~ JetBlue's unsolicited proposal to acquire all of our outstanding shares in an all-cash transaction and the JetBlue Merger Agreement as well as ~~$7.6~~$20.6 million related to our retention bonus ~~program.~~ programs. Special credits for the three months ended ~~June~~September 30, 2021 consisted of ~~$99.3~~$86.4 million related to the grant component of the ~~PSP2 and~~ PSP3 agreements with the Treasury. ~~In addition, we recorded~~ ~~$16.3 millionrelated to the CARES Act Employee Retention credit. These~~This special ~~credits were~~credit was partially offset by ~~$0.6~~$0.6 million in special charges recorded in connection with the rehire of Team Members previously terminated under our involuntary employee separation program which were rehired in compliance with the restrictions mandated by our participation in the ~~PSP2.~~PSP3. For additional information, refer to "Notes to Condensed Consolidated Financial Statements—5. Special Charges (Credits)."

Other operating expenses for the three months ended ~~June~~September 30, 2022 increased by ~~$70.7~~$8.4 million, or ~~62.0%~~5.2%, as compared to the three months ended ~~June~~September 30, 2021. The increase in other operating expenses on a dollar basis was primarily due to an increase in overall operations and an increase in ground handling ~~expense, travel and lodging expense and passenger reaccomodation expense,~~rates at certain airports at which we operate, period over period. As compared to the prior year period, departures increased by ~~17.0%~~12.3% and passenger flight segments increased by ~~15.9%~~20.0%, which drove ~~these~~ increases in variable other operating expenses. ~~The increase~~These increases were partially offset by a decrease in ~~ground handling~~passenger reaccommodation expense, ~~was also attributable to higher rates,~~ period over period. In addition, we had higher passenger reaccomodation expense, period over period, related to a number of adverse weather events and increases in air traffic control ("ATC") programs and restrictions, which led to a number

~~of flight delays and cancellations during the second quarter of 2022.~~ The ~~increase~~decrease on a per-ASM basis, was primarily attributable to ~~higher~~lower passenger reaccommodation ~~expense, ground handling rates and travel and lodging~~ expense, as compared to the prior year period partially offset by higher ground handling rates and other airport services as well as third party labor expense, period over period.

Other (Income) Expense

Our interest expense and corresponding capitalized interest for the three months ended ~~June~~September 30, 2022 primarily represented interest related to the financing of purchased aircraft as well as the interest and accretion related to our 8.00% senior secured notes, the discount amortization related to our convertible notes due in 2026 and the interest related to our convertible notes. In addition, our interest expense for the three months ended ~~June~~September 30, 2022, includes favorable mark to market adjustments of ~~$8.4~~$15.0 million to the derivative liability related to our convertible notes due 2026. Refer to "Notes to Condensed

Consolidated Financial Statements—11. Fair Value Measurements" for additional information. Our interest expense and corresponding capitalized interest for the three months ended ~~June~~September 30, 2021, primarily ~~represents~~represent interest related to the financing of purchased aircraft as well as the interest related to our ~~convertib~~leconvertible notes and the interest and accretion related to our 8.00% senior secured notes.As of ~~June~~September 30, 2022 and 2021, we had 73 and 72 aircraft financed through fixed-rate long-term debt, respectively.

During the three months ended June 30, 2022, we had no loss on extinguishment of debt in our condensed consolidated statement of operations. Our loss on extinguishment of debt for the three months ended June 30, 2021 primarily represents premiums paid to early extinguish a portion of our 8.00% senior secured notes and our convertible notes due 2025. In addition, it includes the write-off of related deferred financing costs and original issuance discount.

Our interest income for the three months ended ~~June~~September 30, 2022 and 2021 primarily represents interest income earned on our cash, cash equivalents and short-term ~~investments as well as interest earned on income tax refunds.~~ ~~Our interest income for the three months ended June 30, 2021 represents interest income earned on cash, cash equivalents and short-term~~ investments.

Income Taxes

Our effective tax rate for the ~~second~~third quarter of 2022 was ~~22.4%~~25.6%, compared to ~~(5.3)%~~186.9% for the ~~second~~third quarter of 2021. The ~~increase~~decrease in the tax rate, as compared to the prior year period, is primarily due to ~~an unfavorable permanent~~the increase of the annualized effective tax ~~adjustment recorded~~rate during the three months ended ~~June~~September 30, 2021, related to the repurchase of a portion of our convertible notes due 2025. Excluding the impact from the unfavorable permanent tax adjustment, our effective tax rate for the three months ended June 30, 2021 would have been 22.0%.2021. While we expect our tax rate to be a fairly consistent in the near term, it will tend to vary depending on items such as changes to permanent tax items, the amount of income we earn in each state and the state tax applicable to such income. Discrete items particular to a given year may also affect our effective tax rates.

Comparison of ~~six~~nine months ended ~~June~~September 30, 2022 to ~~six~~nine months ended ~~June~~September 30, 2021

Operating Revenues

Operating revenues increased ~~$1,013.4~~$1,433.9 million, or ~~76.7%~~63.9%, to ~~$2,334.0~~$3,677.1 million for the ~~six~~nine months ended ~~June~~September 30, 2022, as compared to the prior year period, primarily due to an increase in traffic of ~~33.8%~~27.8%, an increase in average yield of ~~32.1%~~28.2% and an increase in load factor of ~~2.7 pts driven by increased air travel demand as compared to prior year period.~~3.7 pts.

Total revenue per passenger flight segment increased ~~34.4%~~28.9%, year over year. The increase in total revenue per passenger flight segment was primarily due to an increase of ~~32.1%~~28.2% in average yield, period over period. Fare revenue per passenger flight segment increased ~~56.9%~~46.4%, as compared to the prior year period, while non-ticket revenue per passenger flight segment increased ~~18.6%~~15.7%, as compared to the prior year period. The increase in non-ticket revenue per passenger flight segment was primarily attributable to increases in bag revenue, passenger usage fee revenue, change fee ~~revenue, bag~~ revenue, seat revenue and boost-it and bundle-it revenue per passenger flight segment, as compared to the prior year.

Operating Expenses

Operating expenses increased for the ~~six~~nine months ended ~~June~~September 30, 2022 by ~~$1,260.8~~$1,731.8 million, or ~~94.8%~~77.4%, as compared to the prior year period primarily due to a ~~93.6%~~86.9% increase in average economic fuel cost per gallon and a ~~33.6%~~24.4% increase in fuel gallons consumed, both of which contributed to a ~~$569.5~~$818.3 million increase in aircraft fuel expense, period over period. We also had an increase in operations as reflected by a ~~33.8%~~27.8% increase in traffic and a ~~29.5%~~22.0% increase in capacity, as a result of increased travel demand as compared to the prior year period. In addition, we had ~~$33.6~~$71.9 million in special charges during the ~~six~~nine months ended ~~June~~September 30, 2022 compared to ~~$291.9~~$377.7 million in special credits in the same period in the prior year. For additional information, refer to "Notes to Condensed Consolidated Financial Statements—5. Special Charges (Credits)."

The elements of the changes in aircraft fuel expense are illustrated in the following table:


		Six Months Ended June 30,							Nine Months Ended September 30,
		2022		2021					2022		2021
		(in thousands, except per-gallon amounts)				Percent Change			(in thousands, except per-gallon amounts)				Percent Change
Fuel gallons consumed	Fuel gallons consumed	254,888		190,748		33.6	%	Fuel gallons consumed	388,027		311,874		24.4	%
Into-plane fuel cost per gallon	Into-plane fuel cost per gallon	$	3.64	$	1.88	93.6	%	Into-plane fuel cost per gallon	$	3.70	$	1.98	86.9	%

Aircraft fuel expense (per condensed consolidated statements of operations)	Aircraft fuel expense (per condensed consolidated statements of operations)	$	927,218	$	357,755	159.2	%	Aircraft fuel expense (per condensed consolidated statements of operations)	$	1,435,714	$	617,373	132.6	%

We measure our operating cost performance on a per-ASM basis, since one ASM is the unit of production of an airline’s capacity. The following table presents our cost per-ASM, or unit cost, for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, followed by explanations of the material changes on a unit cost basis and/or dollar basis:


		Six Months Ended June 30,					Dollar Change				Percent Change				Cost per ASM					Per-ASM Change	Percent Change			Nine Months Ended September 30,								Dollar Change				Percent Change				Cost per ASM					Per-ASM Change		Percent Change
						Six Months Ended June 30,												Nine Months Ended September 30,
				2022									2021				2022						2021					2022										2021					2022						2021
		(in thousands)														(in cents)										(in thousands)															(in cents)
Salaries, wages, and benefits	Salaries, wages, and benefits	$	614,524	$	502,928				$	111,596			22.2	%		2.61			2.76			(0.15)					(5.4)	%	Salaries, wages, and benefits	$	926,481			$	780,300			$	146,181		18.7	%		2.60		2.67			(0.07)	(2.6)	%
Aircraft fuel	Aircraft fuel	927,218		357,755			569,463				159.2	%			3.93		1.97			1.96	99.5	%	Aircraft fuel	1,435,714				617,373				818,341				132.6	%			4.02			2.11		1.91		90.5	%
Landing fees and other rents	Landing fees and other rents	174,957		153,605			21,352				13.9	%			0.74		0.84			(0.10)	(11.9)	%	Landing fees and other rents	270,131				231,308				38,823				16.8	%			0.76			0.79		(0.03)		(3.8)	%
Depreciation and amortization	Depreciation and amortization	152,660		148,015			4,645				3.1	%			0.65		0.81			(0.16)	(19.8)	%	Depreciation and amortization	230,844				222,275				8,569				3.9	%			0.65			0.76		(0.11)		(14.5)	%
Aircraft rent	Aircraft rent	134,676		119,423			15,253				12.8	%			0.57		0.66			(0.09)	(13.6)	%	Aircraft rent	210,008				185,296				24,712				13.3	%			0.59			0.63		(0.04)		(6.3)	%
Maintenance, materials and repairs	Maintenance, materials and repairs	90,922		69,542			21,380				30.7	%			0.39		0.38			0.01	2.6	%	Maintenance, materials and repairs	136,048				110,725				25,323				22.9	%			0.38			0.38		—		—	%
Distribution	Distribution	84,075		58,905			25,170				42.7	%			0.36		0.32			0.04	12.5	%	Distribution	131,460				94,990				36,470				38.4	%			0.37			0.32		0.05		15.6	%
Loss on disposal of assets	Loss on disposal of assets	22,188		1,306			20,882				NM				0.09		0.01			0.08	NM		Loss on disposal of assets	31,562				1,838				29,724				NM				0.09			0.01		0.08		NM
Special charges (credits)	Special charges (credits)	33,567		(291,940)			325,507				NM				0.14		(1.60)			1.74	NM		Special charges (credits)	71,926				(377,715)				449,641				NM				0.20			(1.29)		1.49		NM
Other operating	Other operating	355,969		210,368			145,601				69.2	%			1.51		1.16			0.35	30.2	%	Other operating	526,151				372,153				153,998				41.4	%			1.47			1.27		0.20		15.7	%
Total operating expenses	Total operating expenses	$	2,590,756	$	1,329,907		$	1,260,849			94.8	%			10.99		7.31			3.68	50.3	%	Total operating expenses	$	3,970,325			$	2,238,543			$	1,731,782			77.4	%			11.12			7.65		3.47		45.4	%
Adjusted CASM (1)	Adjusted CASM (1)														10.76		8.90			1.86	20.9	%	Adjusted CASM (1)																	10.83			8.93		1.90		21.3	%
Adjusted CASM ex-fuel (2)	Adjusted CASM ex-fuel (2)														6.82		6.93			(0.11)	(1.6)	%	Adjusted CASM ex-fuel (2)																	6.81			6.82		(0.01)		(0.1)	%

(1)Reconciliation of CASM to Adjusted CASM:


		Six Months Ended June 30,							Nine Months Ended September 30,
		2022			2021				2022			2021
		(in millions)		Per ASM	(in millions)		Per ASM		(in millions)		Per ASM	(in millions)		Per ASM
CASM (cents)	CASM (cents)			10.99			7.31	CASM (cents)			11.12			7.65

Loss on disposal of assets	Loss on disposal of assets	$	22.2	0.09	$	1.3	0.01	Loss on disposal of assets	$	31.6	0.09	$	1.8	0.01
Special charges (credits)	Special charges (credits)	33.6		0.14	(291.9)		(1.60)	Special charges (credits)	71.9		0.20	(377.7)		(1.29)

Federal excise tax recovery	Federal excise tax recovery	—		—	(2.2)		(0.01)	Federal excise tax recovery	—		—	(2.2)		(0.01)
Accelerated depreciation	Accelerated depreciation	—		—	3.5		0.02	Accelerated depreciation	—		—	3.5		0.01
Adjusted CASM (cents)	Adjusted CASM (cents)			10.76			8.90	Adjusted CASM (cents)			10.83			8.93

(2)Excludes aircraft fuel expense, loss on disposal of assets, special charges (credits), amounts related to out-of-period interrupted trip expense credits recognized in connection with Federal Excise Tax recovery, and accelerated depreciation on current aircraft seats related to the retrofit of 36 aircraft with new Acro6 seats.

Our Adjusted CASM ex-fuel for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~6.82~~6.81, cents as compared to ~~6.93~~6.82 cents for the ~~six~~nine months ended ~~June~~September 30, 2021. Improved air travel demand, as compared to the prior year period, drove an increase of ~~29.5%~~22.0% in ASMs, period over period. This increase in ASMs drove a decrease in operating expenses on a per-ASM basis with the greatest impact noted on primarily fixed costs such as ~~salaries, wages, and benefits expense,~~ depreciation and amortization expense, salaries, wages, and ~~landing fees and other rents~~benefits expense, and aircraft rent expense. On a per-ASM basis, these decreases were partially offset by increases in ~~reaccommodation~~ground handling expense and ~~ground handling~~travel and lodging expense, period over period.

Salaries, wages and benefits for the ~~six~~nine months ended ~~June~~September 30, 2022 increased ~~$111.6~~$146.2 million, or ~~22.2%~~18.7%, as compared to the prior year period. This increase on a dollar basis was primarily driven by higher salaries, crew overtime, ~~and~~ per diem pay, 401(k) expense and ~~401(k)~~health insurance expense, period over period. The increase in salaries and ~~crew overtime and~~ per diem pay was mainly driven by ~~a 17.2%~~an 18.0% increase in our pilot and flight attendant workforce, period over period, as well as due to an increase in operations as compared to the prior year period. The increase in crew overtime was primarily related to the increase in operations. The increase in 401(k) expense was mainly driven by higher pay to our pilot workforce driven by an increase in operations as well as higher average pay rates and 401(k) employer contribution rates to our pilots as compared to the prior year

period. The increase in health insurance expense was mainly driven by higher volume of claims as compared to the prior year period.

Landing fees and other rents for the ~~six~~nine months ended ~~June~~September 30, 2022 increased ~~$21.4~~$38.8 million, or ~~13.9%~~16.8%, as compared to the prior year period. On a dollar basis, landing fees and other rents expense primarily increased as a result of an increase in facility rent, gate charges, ~~and~~ overfly fees and station baggage rent driven by increased operations, higher rent rates and the addition of new stations as well as new gates at our existing stations, period over period. Gate charges, ~~and~~ overfly fees as well as a portion of facility rent and station baggage rent are variable in nature and vary based on factors such as the number of departures and passengers. As compared to the prior year period, departures increased by ~~32.0%~~24.4% and passenger flight segments increased by ~~31.5%~~27.2%. These increases were partially offset by an increase in signatory adjustment credits as compared to the prior year period. On a per-ASM basis, landing fees and other rents decreased, period over period, primarily due to a lower average rate per landing based on the location and volume of where we operated. This decrease on a per-ASM basis was partially offset by an increase in facility rent and gate charges, as mentioned above.

Depreciation and amortization for the ~~six~~nine months ended ~~June~~September 30, 2022 increased by ~~$4.6~~$8.6 million, or ~~3.1%~~3.9%, as compared to the prior year period. The increase in depreciation expense on a dollar basis was primarily driven by an increase in computer hardware and software, spare rotables and ~~spare rotables.~~leasehold improvements. On a per-ASM basis, depreciation and amortization expense decreased due to a change in the composition of our aircraft fleet between purchased aircraft (for which depreciation expense is recorded under depreciation and amortization) and leased aircraft (for which rent expense is recorded under aircraft rent). Since the prior year period, we have taken delivery of 15 new leased aircraft, which increased capacity but had no effect on depreciation expense.

We account for heavy maintenance under the deferral method. Under the deferral method, the cost of heavy maintenance is capitalized and amortized as a component of depreciation and amortization expense in the statement of operations until the earlier of the next heavy maintenance event or end of the lease term. The amortization of heavy maintenance costs was ~~$46.0~~$69.3 million and ~~$46.5~~$69.2 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. As our fleet continues to grow and age, we generally expect that the amount of deferred heavy maintenance events will increase and will result in an increase in the amortization of those costs. If heavy maintenance events were amortized within maintenance, materials and repairs expense in the condensed consolidated statements of operations, our maintenance, materials and repairs expense would have been ~~$136.9~~$205.4 million and ~~$116.0~~$179.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

Aircraft rent expense for the ~~six~~nine months ended ~~June~~September 30, 2022 increased by ~~$15.3~~$24.7 million, or ~~12.8%~~13.3%, as compared to the prior year period. This increase in aircraft rent expense was primarily due to an increase in the number of aircraft financed under operating leases throughout the current period, as compared to the prior year period. Since the ~~second~~third quarter of 2021, we have acquired 15 new aircraft financed under operating leases. The increase in aircraft rent was partially offset by a decrease in

supplemental rent, period over period. The decrease in supplemental rent is driven by the accrual of lease return costs ~~in the prior year period~~ related to the purchase of four aircraft and two spare engines off lease made during the ~~six~~nine months ended ~~June~~September 30, 2021, partially offset by the accrual of lease return cost in the current year period related to our short-term spare engines. The decrease on a per-ASM basis was primarily due to the decrease in supplemental rent noted above.

Maintenance, materials and repairs expense for the ~~six~~nine months ended ~~June~~September 30, 2022 increased by ~~$21.4~~$25.3 million, or ~~30.7%~~22.9%, as compared to the prior year period. The increase on a dollar basis was mainly due to a higher volume and aging of aircraft and ~~rotable~~ maintenance events as a result of an increase of ~~21.6%~~15.1% in average daily aircraft utilization in the current period as compared to the prior year period. On a per-ASM basis, maintenance, materials and repairs expense remained ~~relatively~~ stable, period over period.

Distribution costs increased by ~~$25.2~~$36.5 million, or ~~42.7%~~38.4%, for the ~~six~~nine months ended ~~June~~September 30, 2022 as compared to the prior year period. The increase on a dollar ~~and per-ASM~~ basis was primarily due to increased sales ~~volume, which impacts our variable~~volume. On a per-ASM basis, distribution costs ~~such as~~increased primarily due to higher average fare resulting in an increase in credit card ~~fees.~~fees year over year.

Loss on disposal of assets for the ~~six~~nine months ended ~~June~~September 30, 2022 primarily consisted of ~~$14.5~~$23.8 million related to the loss on ~~seven~~eleven aircraft sale leaseback transactions completed during the ~~first and second quarters of~~nine months ended September 30, 2022 and $6.6 million related to the impairment of one spare engine during the first quarter of 2022 which was damaged beyond economic repair. Loss on disposal of assets for the ~~six~~nine months ended ~~June~~September 30, 2021 consisted of $1.1 million related to the loss on the sale of auxiliary power units ("APUs"), ~~$0.2~~$0.6 million related to the loss on ~~two~~three aircraft sale leaseback transactions completed during the second ~~quarter~~and third quarters of 2021 and disposal of excess and obsolete inventory.

Special charges for the ~~six~~nine months ended ~~June~~September 30, 2022 consisted of ~~$21.5~~$39.2 million in legal, advisory and other fees related to the former Merger Agreement with Frontier, ~~and~~ JetBlue's unsolicited proposal to acquire all of our outstanding shares in an all-cash transaction and the JetBlue Merger Agreement as well as ~~$12.1~~$32.7 million related to our retention bonus ~~program. Special~~

programs. Special credits for the ~~six~~nine months ended ~~June~~September 30, 2021 consisted of ~~$255.8~~$342.2 million related to the grant component of the PSP agreement with the Treasury. In addition, we recorded $37.5 millionrelated to the CARES ~~Act~~ Employee Retention credit. These special credits were partially offset by ~~$1.4~~$2.0 million in special charges recorded in connection with the rehire of Team Members previously terminated under our involuntary employee separation program which were rehired in compliance with the restrictions mandated by our participation in the ~~PSP2.~~PSP. For additional information, refer to "Notes to Condensed Consolidated Financial Statements—5. Special Charges (Credits)."

Other operating expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 increased by ~~$145.6~~$154.0 million, or ~~69.2%~~41.4%, as compared to the prior year period. The increase in other operating expenses on a dollar basis was primarily due to an increase in ~~passenger reaccomodation~~travel and lodging expense, ground handling expense and ~~travel and lodging~~security expense, period over ~~period.~~period, primarily as a result of an increase in operations. As compared to the prior year period, departures increased by ~~32.0%~~24.4%, and we had ~~31.5%~~27.2% more passenger flight segments, which drove increases in variable other operating expenses. In addition, we had higher passenger ~~reaccomodation~~reaccommodation expense, period over period, related to a number of adverse weather events and increases in ATC programs and restrictions, which led to a significant number of flight delays and cancellations during the first half of 2022. The increase on a per-ASM basis was primarily attributable to higher ~~passenger reaccommodation expense,~~ ground handling ~~rates and~~expense, travel and lodging expense and passenger reaccommodation expense, as compared to the prior year period.

Other (Income) Expense

Our interest expense and corresponding capitalized interest for the ~~six~~nine months ended ~~June~~September 30, 2022 primarily represented interest related to the financing of purchased aircraft as well as the interest and accretion related to our 8.00% senior secured notes, the discount amortization related to our convertible notes due in 2026 and the interest related to our convertible notes. In addition, our interest expense for the ~~six~~nine months ended ~~June~~September 30, 2022, includes favorable mark to market adjustments of ~~$9.3~~$24.3 million to the derivative liability related to our convertible notes due 2026. Refer to "Notes to Condensed Consolidated Financial Statements—11. Fair Value Measurements" for additional information. Our interest expense and corresponding capitalized interest for the ~~six~~nine months ended ~~June~~September 30, 2021 primarily ~~represents~~represent interest related to the financing of purchased aircraft as well as the interest related to our convertible notes and the interest and accretion related to our 8.00% senior secured notes. As of ~~June~~September 30, 2022 and 2021, we hadhad 73 andand 72 aircraft financed through secured long-term debt arrangements, respectively.

During the ~~six~~nine months ended ~~June~~September 30, 2022, we had no loss on extinguishment of debt in our condensed consolidated statement of operations. Our loss on extinguishment of debt for the ~~six~~nine months ended ~~June~~September 30, 2021 primarily represents premiums paid to early extinguish a portion of our 8.00% senior secured notes and 4.75% convertible notes due 2025. In addition, it includes the write-off of related deferred financing costs and original issuance discount.

Our interest income for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 represents interest income earned on cash, cash equivalents and short-term investments as well as interest earned on income tax refunds.

Income Taxes

Our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~20.7%~~21.4%, compared to ~~2.7%~~10.1% for the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in tax rate, as compared to the prior year period, is primarily due to an unfavorable permanent tax adjustment recorded during the ~~six~~nine months ended ~~June~~September 30, 2021, related to the repurchase of a portion of our convertible notes due 2025. Excluding this unfavorable permanent tax adjustment, our effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2021 would have been ~~20.9%~~21.1%. While we expect our tax rate to be fairly consistent in the near term, it will tend to vary depending on items such as changes to permanent tax items, the amount of income we earn in each state and the state tax applicable to such income. Discrete items particular to a given year may also affect our effective tax rates.

Liquidity and Capital Resources

Our primary sources of liquidity generally include cash on hand, cash provided by operations and capital from debt and equity financing. Primary uses of liquidity are for working capital needs, capital expenditures, aircraft and engine pre-delivery deposit payments ("PDPs") and debt and lease obligations. We expect to meet our cash needs for the next twelve months with cash and cash equivalents, financing arrangements and cash flows from operations. As of ~~June~~September 30, 2022, we had ~~$1,543.0~~$1,299.7 million of liquidity comprised of unrestricted cash and cash equivalents, short-term investment securities and funds available under our revolving credit facility due in 2024.

As of ~~June~~September 30, 2022, we had $25.4 million recorded within current maturities of long-term debt and finance leases on our condensed consolidated balance sheets related to our convertible notes due 2025. As of ~~June~~September 30, 2022, the convertible notes due 2025 may be converted by noteholders through ~~September 30,~~December 31, 2022. During the second quarter of 2022, $2.8 million of our convertible notes due 2025 were converted to 217,226 shares of our voting common stock. Refer to "Notes to Condensed Consolidated Financial Statements—12. Debt and Other Obligations," for additional information on the convertible notes due 2025.

As of ~~June~~September 30, 2022, we had $~~456.8~~460.7 million, net of the related unamortized debt discount of ~~$43.2~~$39.3 million, recorded within long-term debt, net and finance leases, less current maturities on our condensed consolidated balance sheets related to our convertible notes due 2026. As of ~~June~~September 30, 2022, the convertible notes due 2026 did not qualify for conversion by noteholders through ~~September 30,~~December 31, 2022. Refer to "Notes to Condensed Consolidated Financial Statements —12. Debt and Other Obligations" for additional information on the convertible notes due 2026.

Currently, one of our largest capital expenditure needs is funding the acquisition costs of our aircraft. Aircraft may be acquired through debt financing, cash purchases, direct leases or sale leaseback transactions. During the ~~six~~nine months ended ~~June~~September 30, 2022, we took delivery of ~~seven~~11 aircraft under sale leaseback transactions and ~~two~~3 spare engines purchased with cash. During the ~~six~~nine months ended ~~June~~September 30, 2022, we made ~~$135.3~~$196.3 million in debt payments (principal, interest and fees) on our outstanding aircraft debt obligations.

Under our purchase agreements for aircraft and engines, we are required to pay PDPs relating to future deliveries at various times prior to each delivery date. During the ~~six~~nine months ended ~~June~~September 30, 2022, we paid ~~$7.4~~$15.6 million in PDPs, net of refunds, and ~~$8.9~~$13.3 million of capitalized interest for future deliveries of aircraft and spare engines. As of ~~June~~September 30, 2022, we had ~~$488.3~~$496.8 million of pre-delivery deposits on flight equipment, including capitalized interest, on our condensed consolidated balance sheets.

As of ~~June~~September 30, 2022, we have secured financing for 40 aircraft to be leased directly from third-party lessors and 106 aircraft which will be financed through sale leaseback transactions, with deliveries expected through 2024. We do not have financing commitments in place for the remaining ~~103~~108 Airbus firm aircraft orders, scheduled for delivery through 2027. However, we have a financing letter of agreement with Airbus which provides backstop financing for a majority of the aircraft included in the A320 NEO Family Purchase Agreement signed in the fourth quarter of 2019. The agreement provides a standby credit facility in the form of senior secured mortgage debt financing. Future aircraft deliveries may be paid in cash, leased or otherwise financed based on market conditions, our prevailing level of liquidity, and capital market availability.

Net Cash Flows Provided (Used) By Operating Activities. Operating activities in the ~~six~~nine months ended ~~June~~September 30, 2022 ~~provided $86.8~~used $32.3 million in cash compared to ~~$484.1~~$277.0 million provided in the ~~six~~nine months ended ~~June~~September 30, 2021. Cash ~~provided~~used by operating activities in the ~~six~~nine months ended ~~June~~September 30, 2022 is primarily related to ~~cash provided from an increase in air traffic liability, an increase in other liabilities as well as higher non-cash expense of depreciation and amortization. These increases were partially offset by~~ the net loss in the period as well as ~~the~~an increase in ~~the~~deferred heavy maintenance, net and deferred income tax benefit in the ~~period~~period. These increases were partially offset by higher non-cash expense of depreciation and ~~deferred heavy maintenance, net.~~amortization as well as increases in air traffic liability, accounts payable and other liabilities.

Net Cash Flows Used In Investing Activities. During the ~~six~~nine months ended ~~June~~September 30, 2022, investing activities used ~~$123.1~~$204.4 million, compared to ~~$179.0~~$263.4 million used in the prior year period. The decrease was mainly driven by a decrease in PDPs paid, net of refunds, partially offset by any increase in purchases of property and equipment, year over year.

Net Cash Flows Used By Financing Activities. During the ~~six~~nine months ended ~~June~~September 30, 2022, financing activities used ~~$100.2~~$143.4 million in cash compared to ~~$240.3~~$286.1 million used in the ~~six~~nine months ended ~~June~~September 30, 2021. During the ~~six~~nine months ended ~~June~~September 30, 2022, we paid ~~$96.8~~$139.8 million in debt principal payment obligations.

Commitments and Contractual Obligations

Our contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies. As of ~~June~~September 30, 2022, our aircraft orders consisted of ~~113~~114 A320 family aircraft with Airbus, including A319neos, A320neos and A321neos, with deliveries expected through 2027. Out of these ~~113~~114 aircraft, we have 106 aircraft scheduled for delivery in the remainder of 2022 and 17 aircraft scheduled for delivery in 2023. As of ~~June~~September 30, 2022, we had secured financing for the 106 aircraft scheduled for delivery from Airbus through the remainder of 2022, which will be financed through sale leaseback transactions. As of ~~June~~September 30, 2022, we do not have financing commitments in place for the remaining ~~103~~108 Airbus aircraft on firm order through 2027. However, we have a financing letter of agreement with Airbus

which provides backstop financing for a majority of the aircraft included in the A320 NEO Family Purchase Agreement signed in the fourth quarter of 2019. The agreement provides a standby credit facility in the form of senior secured mortgage debt financing. The contractual purchase amounts for all aircraft orders from Airbus are included within the flight equipment purchase obligations in the table below.

During the third quarter of 2021, we entered into an Engine Purchase Support Agreement which requires us to purchase a certain number of spare engines in order to maintain a contractual ratio of spare engines to aircraft in the fleet. As of ~~June~~September 30, 2022, we are committed to purchase 1413 PW1100G-JM spare engines, with deliveries through 2027.

During the third quarter of 2019, the United States announced its decision to levy tariffs on certain imports from the European Union, including commercial aircraft and related parts. These tariffs would include aircraft and other parts that we are already contractually obligated to purchase including those reflected above. In June 2021, the United States Trade Representative announced that the United States and European Union had agreed to suspend reciprocal tariffs on large civilian aircraft for five years, pending discussions to resolve their trade dispute.

AsIn addition to the aircraft purchase agreement, as of ~~June~~September 30, 2022, we had secured 40 direct leases for aircraft with third-party lessors, with deliveries in the remainder of 2022 through 2024. Aircraft rent commitments for future aircraft deliveries to be financed under direct leases from third-party lessors and sale leaseback transactions are expected to be approximately ~~$18.0~~$8.6 million for the remainder of 2022, ~~$110.8~~$92.7 million in 2023, ~~$188.9~~$187.8 million in 2024, ~~$217.9~~$216.4 million in 2025, ~~$217.9~~$216.4 million in 2026, and ~~$1,861.5~~$1,874.8 million in 2027 and beyond.

We have significant obligations for aircraft and spare engines as 7478 of our ~~180~~184 aircraft and 126 of our 3429 spare engines are financed under operating leases. These leases expire between ~~2022~~2024 and 2040. Aircraft rent payments were ~~$68.0~~$72.1 million and ~~$68.5~~$62.9 million for the three months ended ~~June~~September 30, 2022 and ~~June~~September 30, 2021, respectively. Aircraft rent payments were ~~$132.9~~$205.0 million and ~~$127.5~~$190.4 million for the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~June~~September 30, 2021, respectively.

Our fixed-rate operating leases with terms greater than 12 months are included within operating lease right-of-use assets with the corresponding liabilities included within current maturities of operating leases and operating leases, less current maturities on our condensed consolidated balance sheets. Leases with a term of 12 months or less and variable-rate leases are not recorded on our condensed consolidated balance sheets. Please see "Notes to Condensed Consolidated Financial Statements—9. Leases" for further discussion on our leases.

We have contractual obligations and commitments primarily with regard to future purchases of aircraft and engines, payments of debt, and lease arrangements. The following table discloses aggregate information about our contractual obligations as of ~~June~~September 30, 2022 and the periods in which payments are due (in millions):


		Remainder of 2022		2023 - 2024		2025 - 2026		2027 and beyond		Total			Remainder of 2022		2023 - 2024		2025 - 2026		2027 and beyond		Total
Long-term debt (1)	Long-term debt (1)	$	96	$	559	$	1,455	$	1,029	$	3,139	Long-term debt (1)	$	53	$	559	$	1,455	$	1,029	$	3,096
Interest and fee commitments (2)	Interest and fee commitments (2)	71		215		135		104		525		Interest and fee commitments (2)	33		215		135		104		487
Finance and operating lease obligations	Finance and operating lease obligations	145		557		481		2,047		3,230		Finance and operating lease obligations	77		592		518		2,278		3,465
Flight equipment purchase obligations (3)	Flight equipment purchase obligations (3)	507		1,907		2,411		873		5,698		Flight equipment purchase obligations (3)	297		1,953		2,651		863		5,764
Other (4)	Other (4)	34		40		36		19		129		Other (4)	75		56		36		19		186
Total future payments on contractual obligations	Total future payments on contractual obligations	$	853	$	3,278	$	4,518	$	4,072	$	12,721	Total future payments on contractual obligations	$	535	$	3,375	$	4,795	$	4,293	$	12,998

(1) Includes principal only associated with our 8.00% senior secured notes, senior term loans, fixed-rate loans, unsecured term loans, Class A, Class B, and Class C Series 2015-1 EETCs, Class AA, Class A, Class B, and Class C Series 2017-1 EETCs and convertible notes. Refer to "Notes to Condensed Consolidated Financial Statements—12. Debt and Other Obligations."

(2) Related to our 8.00% senior secured notes, senior term loans, fixed-rate loans, unsecured term loans, Class A, Class B, and Class C Series 2015-1 EETCs, Class AA, Class A, Class B, and Class C Series 2017-1 EETCs and convertible notes. Includes interest accrued as of ~~June~~September 30, 2022 related to our variable-rate revolving credit facility.

(3) Includes estimated amounts for contractual price escalations and PDPs.

(4) Primarily related to our reservation system, construction commitments related to our new headquarters campus and residential building and other miscellaneous subscriptions and services. Refer to "Notes to Condensed Consolidated Financial Statements—10. Commitments and Contingencies."

Currently, one of our lease agreements require that we pay maintenance reserves to aircraft lessors to be held as collateral in advance of our required performance of major maintenance activities.

During the fourth quarter of 2019, we purchased an 8.5-acre parcel of land for $41.0 million and entered into a 99-year lease agreement for the lease of a 2.6-acre parcel of land, in Dania Beach, Florida, where we are building a new headquarters campus and a 200-unit residential building. During the first quarter of 2022, we began building our new headquarters campus and a 200-unit residential building with an expected completion during the fourth quarter 2023. Operating lease commitments related to this lease are included in the table above under the caption "Finance and operating lease obligations." For more detailed information, please refer to “Notes to Condensed Consolidated Financial Statements—9. Leases." Commitments related to the construction of the headquarters campus and the 200-unit residential building are included in the table above under the caption "Other."

Off-Balance Sheet Arrangements

As of ~~June~~September 30, 2022, we had lines of credit related to corporate credit cards of $20.1 million, from which we had drawn ~~$1.1~~$1.2 million.

As of ~~June~~September 30, 2022, we had lines of credit with counterparties for both physical fuel delivery and derivatives in the amount of $41.5 million. As of ~~June~~September 30, 2022, we had drawn ~~$15.9~~$2.1 million on these lines of credit for physical fuel delivery. We are required to post collateral for any excess above the lines of credit if the derivatives are in a net liability position and make periodic payments in order to maintain an adequate undrawn portion for physical fuel delivery. As of ~~June~~September 30, 2022, we did not hold any derivatives.

As of ~~June~~September 30, 2022, we had $11.4 million in uncollateralized surety bonds and $85.0 million in standby letters of credit, collateralized by $75.0 million of restricted cash, representing an off-balance sheet commitment, of which ~~$26.2~~$25.7 million ~~had been drawn upon for~~were issued letters of credit.

GLOSSARY OF AIRLINE TERMS

Set forth below is a glossary of industry terms:

“Adjusted CASM” means operating expenses, excluding loss on disposal of assets, special charges and credits, accelerated depreciation and federal excise tax recovery, divided by ASMs.

“Adjusted CASM ex fuel” means operating expenses excluding aircraft fuel expense, loss on disposal of assets, special charges and credits, accelerated depreciation and federal excise tax recovery, divided by ASMs.

“AFA-CWA” means the Association of Flight Attendants-CWA.

“Air traffic liability” or “ATL” means the value of tickets sold in advance of travel.

“ALPA” means the Air Line Pilots Association, International.

“ASIF” means an Aviation Security Infrastructure Fee assessed by the TSA on each airline.

“Available seat miles” or “ASMs” means the number of seats available for passengers multiplied by the number of miles the seats are flown, also referred to as "capacity."

“Average aircraft” means the average number of aircraft in our fleet as calculated on a daily basis.

“Average daily aircraft utilization” means block hours divided by number of days in the period divided by average aircraft.

“Average fuel cost per gallon” means total aircraft fuel expense divided by the total number of fuel gallons consumed.

“Average stage length” represents the average number of miles flown per flight.

“Average yield” means average operating revenue earned per RPM, calculated as total revenue divided by RPMs, also referred to as "passenger yield."

“Block hours” means the number of hours during which the aircraft is in revenue service, measured from the time of gate departure before take-off until the time of gate arrival at the destination.

“CASM” or “unit costs” means operating expenses divided by ASMs.

“CBA” means a collective bargaining agreement.

“CBP” means United States Customs and Border Protection.

“DOT” means the United States Department of Transportation.

"EETC" means enhanced equipment trust certificate.

“EPA” means the United States Environmental Protection Agency.

“FAA” means the United States Federal Aviation Administration.

“Fare revenue per passenger flight segment” means total fare passenger revenue divided by passenger flight segments.

“FCC” means the United States Federal Communications Commission.

"FLL Airport" means the Fort Lauderdale Hollywood International Airport.

“GDS” means Global Distribution System (e.g., Amadeus, Galileo, Sabre and Worldspan).

"IAMAW" means the International Association of Machinists and Aerospace Workers.

“Into-plane fuel cost per gallon” means into-plane fuel expense divided by number of fuel gallons consumed.

“Into-plane fuel expense” represents the cost of jet fuel and certain other charges such as fuel taxes and oil.

“Load factor” means the percentage of aircraft seats actually occupied on a flight (RPMs divided by ASMs).

“NMB” means the National Mediation Board.

"Non-ticket revenue" means total non-fare passenger revenue and other revenue

“Non-ticket revenue per passenger flight segment” means total non-fare passenger revenue and other revenue divided by passenger flight segments.

“OTA” means Online Travel Agent (e.g., Orbitz and Travelocity).

"PAFCA" means the Professional Airline Flight Control Association.

“Passenger flight segments” means the total number of passengers flown on all flight segments.

“PDP” means pre-delivery deposit payment.

“Revenue passenger mile” or “RPM” means one revenue passenger transported one mile. RPMs equals revenue passengers multiplied by miles flown, also referred to as “traffic.”

“RLA” means the United States Railway Labor Act.

"Total operating revenue per-ASM," "TRASM" or "unit revenue" means operating revenue divided by ASMs.

“TWU” means the Transport Workers Union of America.

“TSA” means the United States Transportation Security Administration.

“ULCC” means “ultra low-cost carrier.”

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk-Sensitive Instruments and Positions

We are subject to certain market risks, including commodity prices (specifically aircraft fuel) and interest rates. We purchase the majority of our jet fuel at prevailing market prices and seek to manage market risk through execution of our hedging strategy and other means. We have market-sensitive instruments in the form of fixed-rate debt instruments, short-term investment securities and, from time to time, financial derivative instruments used to hedge our exposure to jet fuel price increases and interest rate increases. We do not purchase or hold any derivative financial instruments for trading purposes. The adverse effects of changes in these markets could pose a potential loss as discussed below. The sensitivity analysis provided below does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.

Aircraft Fuel. Our results of operations can vary materially due to changes in the price and availability of aircraft fuel. Aircraft fuel expense for the ~~six~~nine months ended ~~June~~September 30, 2022 represented approximately ~~35.8%~~36.2% of our operating expenses. Volatility in aircraft fuel prices or a shortage of supply could have a material adverse effect on our operations and operating results. We source a significant portion of our fuel from refining resources located in the southeast United States, particularly facilities adjacent to the Gulf of Mexico. Gulf Coast fuel is subject to volatility and supply disruptions, particularly during hurricane season when refinery shutdowns have occurred, or when the threat of weather-related disruptions has caused Gulf Coast fuel prices to spike above other regional sources. Both jet fuel swaps and jet fuel options are used at times to protect the refining price risk between the price of crude oil and the price of refined jet fuel, and to manage the risk of increasing fuel prices. Gulf Coast Jet indexed fuel is the basis for a substantial majority of our fuel consumption. Based on our annual fuel consumption over the last 12 months, a hypothetical 10% increase in the average price per gallon of aircraft fuel would have increased into-plane aircraft fuel expense by approximately ~~$148~~$173 million. As of ~~June~~September 30, 2022, we did not have any outstanding jet fuel derivatives, and we have not engaged in fuel derivative activity since 2015.

Interest Rates. We have market risk associated with our short-term investment securities, which had a fair market value of $~~105.9~~106.3 million as of ~~June~~September 30, 2022.

Fixed-Rate Debt. As of ~~June~~September 30, 2022, we had ~~$1,966.8~~$1,924.0 million outstanding in fixed-rate debt related to 43 Airbus A320 aircraft and 30 Airbus A321 aircraft which had a fair value of ~~$1,794.7~~$1,716.7 million. In addition, as of ~~June~~September 30, 2022, we had $510.0 million and $136.3 million outstanding in fixed-rate debt related to our 8.00% senior secured notes and our unsecured term loans, respectively, which had fair values of ~~$468.4~~$470.5 million and ~~$111.0~~$108.8 million. As of ~~June~~September 30, 2022, we also had $525.4 million outstanding in convertible debt which had a fair value of ~~$505.3~~$463.5 million.

Variable-Rate Debt. As of ~~June~~September 30, 2022, we did not have any outstanding variable-rate long term debt.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~June~~September 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its chief executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of ~~June~~September 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), during the quarter ended ~~June~~September 30, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. We believe the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on our financial position, liquidity or results of operations.

In 2017, we were sued in the Eastern District of New York in a purported class action, Cox, et al. v. Spirit Airlines, Inc., alleging state-law claims of breach of contract, unjust enrichment and fraud relating to our practice of charging fees for ancillary products and services. The original action was dismissed by the District Court, however, following the plaintiff’s appeal to the Second Circuit, the case was remanded to the District Court for further review on the breach of contract claim. A hearing on our Motion for Summary Judgment and plaintiff’s Motion for Class Certification was held on December 10, 2021. The Court granted the plaintiff’s class certification motion on March 29, 2022. We subsequently filed a motion for reconsideration on April 26, 2022 and an oral argument was held on May 19, 2022. We intend to vigorously defend against this lawsuit. As of September 30, 2022, the potential outcomes of these claims cannot be determined and an estimate of the reasonably possible loss or range of loss cannot be made.

Following an audit by the IRS related to the collection of federal excise taxes on optional passenger seat selection charges covering the period of the second quarter 2018 through the fourth quarter 2020, on March 31, 2022, we were assessed $34.9 million. On July 19, 2022, the assessment was reduced to $27.5 million. We believe the assessment is without merit and intend to challenge the ~~assessment.~~assessment; therefore, we have not recognized a loss contingency.

ITEM 1A.RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 8, 2022 (our "2021 10-K"), other than the risk factors disclosed in Item 1A "Risk Factors" contained in our Quarterly Report on the Form 10-Q for the quarter ended June 30, 2022, filed with the Securities and Exchange Commission on August 9, 2022, and the addition of the following risk factors. Investors are urged to review all such risk factors carefully.

~~The pendency of the proposed Merger may cause disruption in our business.~~

On July 28, 2022, we entered into the Merger Agreement with JetBlue and Merger Sub, pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Spirit, with Spirit continuing as the surviving entity.

The Merger Agreement restricts us from taking specified actions without JetBlue’s consent until the Merger is completed or the Merger Agreement is terminated, including amending our organizational documents, issuing shares of our common stock, divesting certain assets (including certain intellectual property rights), declaring or paying dividends, making certain significant acquisitions or investments, entering into any new lines of business, incurring certain indebtedness in excess of certain thresholds, amending or modifying certain material contracts, making non-ordinary course capital expenditures, making certain non-ordinary course changes to personnel and employee compensation, changing the cabin configuration or amenities on our aircraft and taking actions that may result in the loss of our FAA airworthiness certification or takeoff and landing slots. These restrictions and others more fully described in the Merger Agreement may affect our ability to execute our business strategies and attain our financial and other goals and may impact our business, results of operations and financial condition.

The pendency of the proposed Merger could cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations. Parties with which we have business relationships, including Guests, pilots, employees, suppliers, third-party service providers and third-party distribution channels, may be uncertain as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties.

The pursuit of the Merger is expected to place a significant burden on our management and internal resources. The diversion of management’s attention away from day-to-day business concerns and any difficulties encountered in the transition process could adversely affect our business, results of operations and financial condition.

We have incurred and will continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger. The substantial majority of these costs will be non-recurring expenses relating to the Merger, and many of these costs are payable regardless of whether or not the Merger is consummated. We also could be subject to litigation related to the proposed Merger, which could prevent or delay the consummation of the Merger and result in significant costs and expenses.

Failure to complete the Merger in a timely manner or at all could negatively impact the market price of our common stock, as well as our future business and our results of operations and financial condition.

The Merger cannot be completed until conditions to closing are satisfied or (if permissible under applicable law) waived. The Merger is subject to numerous closing conditions, including among other things: (1) approval of the transactions by our stockholders; (2) receipt of applicable regulatory approvals, including approvals from the FCC, FAA and DOT and the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other competition laws, and other required regulatory approvals; (3) the absence of any law or order prohibiting the consummation of the transactions; and (4) the absence of any material adverse effect (as defined in the Merger Agreement) on the Company.

The satisfaction of the required conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring. Further, there can be no assurance that the conditions to the closing of the Merger will be satisfied or waived or that the Merger will be completed.

~~If the Merger is not completed in a timely manner or at all, our ongoing business may be adversely affected as follows:~~

•~~we may experience negative reactions from the financial markets, and our stock price could decline to the extent that the current market price reflects an assumption that the Merger will be completed;~~

•~~we may experience negative reactions from employees, Guests, suppliers or other third parties;~~

•~~we may be subject to litigation, which could result in significant costs and expenses;~~

•~~management’s focus may be diverted from day-to-day business operations and from pursuing other opportunities that could have been beneficial to the Company; and~~

•~~our costs of pursuing the Merger may be higher than anticipated.~~

Additionally, in approving the Merger Agreement, the Board of Directors considered a number of factors and potential benefits, including the fact that the merger consideration to be received by holders of common stock represented a significant premium over the last closing stock price prior to announcement of the Merger. If the Merger is not completed, the holders of our common stock will not realize this benefit of the Merger.

In addition to the above risks, we may be required, under certain circumstances, to pay JetBlue a breakup fee equal to $94.2 million and/or to reimburse or indemnify JetBlue for certain of its expenses. If the Merger is not consummated due to the inability to receive regulatory approval, JetBlue would be required to pay Spirit a reverse termination fee of $70 million. The reverse termination fee may not be sufficient to cover all of the expenses Spirit incurred in connection with the Merger, which may have an adverse effect on our liquidity and results of operations. If the Merger is not consummated, there can be no assurance that these risks will not materialize and will not materially adversely affect our stock price, business, results of operations and financial condition.

In order to complete the Merger, the Company and JetBlue must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions, completion of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.

Although the Company and JetBlue have agreed to use reasonable best efforts, subject to certain limitations, to make certain governmental filings and obtain the required governmental approvals, including from the FCC, FAA and DOT, or expiration or earlier termination of relevant waiting periods, as the case may be, there can be no assurance that the relevant waiting periods will expire or be terminated or that the relevant approvals will be obtained. In connection with its prior tender offer, JetBlue has made regulatory submissions to certain governmental authorities, and received a “second request” for information from the U.S. Department of Justice, with which the Company and JetBlue are in the process of complying. Complying with requests for information from governmental authorities is time-consuming and expensive and distracts management from the day-to-day operations of the Company. As a condition to approving the Merger, these governmental authorities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of our business after completion of the Merger. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or preventing completion of the Merger or imposing additional material costs on or materially limiting the revenues of the combined company following the Merger, or otherwise adversely affecting, including to a material extent, our business, results of operations and financial condition after completion of the Merger. If we are required to divest assets or businesses, there can be no assurance that we will be able to negotiate such divestitures expeditiously or on favorable terms or that the governmental authorities will approve the terms of such divestitures. We can provide no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment of the Merger. Any of the governmental authorities from which we need approvals may also sue us and JetBlue in U.S. federal court to prevent the Merger from being consummated. Defending any such lawsuit will be time-consuming and expensive and there can be no assurance that we and JetBlue would ultimately be successful.

If the Merger is not consummated, holders of convertible notes ~~or warrants~~ will not receive any adjustment to the conversion rate ~~or exercise price~~ as a result of any prepayment of merger consideration or ticking ~~fee.~~fee, and holders of convertible notes or warrants will not receive the merger consideration that would have been paid at closing of the Merger.

The indentures governing each series of our convertible notes outstanding ~~and the warrant agreements governing our outstanding warrants~~ do not provide for an adjustment to the conversion rate or exercise price when payments are made by a third party to our stockholders, as JetBlue has agreed to do in the Merger Agreement. As a result, if the Merger is not consummated, convertible noteholders ~~and warrant holders~~ will not receive the benefit of these payments.

~~You must be a Spirit stockholder as~~ With respect to the Company’s warrants, if the merger is not consummated, the exercise price of the ~~specified~~warrants will be adjusted for each prepayment for which a record ~~dates to receive~~date has been set, but the ~~prepayments~~remainder of ~~merger consideration.~~

~~The prepayments of~~the merger consideration ~~by JetBlue will only be made to Spirit stockholders as of the specified record dates. If you are not a Spirit stockholder as of that record date, you~~ will not receive the relevant prepayment even if you are a Spirit stockholder at the time of consummation of the Merger. As a result, if you are not a Spirit stockholder at each relevant time, you will receive less than $33.50 (or less than the up to $34.15 maximum amount of merger consideration, depending on the timing of Closing) in total for each share of Spirit common stock you own upon the consummation of the Merger.be paid.

Increased labor costs, union disputes, employee strikes and other labor-related disruption may adversely affect our business, results of operations and financial conditions.

Our business is labor intensive, with labor costs representing approximately 32.4%, 39.3% and 26.0% of our total operating costs for 2021, 2020 and 2019, respectively. As of ~~June~~September 30, 2022, approximately ~~79%~~80% of our workforce was represented by labor unions. We cannot assure that our labor costs going forward will remain competitive, because in the future our labor agreements may be amended or become amendable and new agreements could have terms with higher labor costs; one or more of our competitors may significantly reduce their labor costs, thereby reducing or eliminating our comparative advantages as to one or more of such competitors; or our labor costs may increase in connection with our growth. If our aircraft maintenance technicians (“AMTs”) vote to unionize, as further described below, we will be required to negotiated a collective bargaining agreement with the Aircraft Mechanics Fraternal Association (the “AMFA”). Any such negotiation may cause us to incur higher labor costs for our AMTs over the term of the agreement than we would have incurred absent such agreement. We may also become subject to additional collective bargaining agreements in the future if other non-unionized workers unionize.

Relations between air carriers and labor unions in the United States are governed by the RLA. Under the RLA, collective bargaining agreements generally contain “amendable dates” rather than expiration dates, subject to standard opener provisions, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the NMB. This process continues until either the parties have reached agreement on a new collective bargaining agreement or the parties have been released to “self-help” by the NMB. In most circumstances, the RLA prohibits strikes; however, after release by the NMB, carriers and unions are free to engage in self-help measures such as lockouts and strikes.

During 2017, we experienced operational disruption from pilot-related work action which adversely impacted our results. We obtained a temporary restraining order to enjoin further illegal labor action. In January 2018, under the guidance of the NMB-assigned mediators, the parties reached a tentative agreement. In February 2018, the pilot group voted to approve the current five-year agreement with us.

In September 2022, ALPA notified us of its intent to amend the current CBA with our pilots and began negotiations. As of September 30, 2022, we continued to negotiate with ALPA.

In March 2016, under the supervision of the NMB, we reached a tentative agreement for a five-year contract with our flight attendants. Our flight attendants ratified the agreement in May 2016. In February 2021, we entered into a Letter of Agreement with the AFA-CWA to change the amendable date of the collective bargaining agreement from May 4, 2021 to September 1, 2021. All other terms of the collective bargaining agreement remained the same. In June 2021, the AFA-CWA notified us, as required by the RLA, that it intended to submit proposed changes to the collective bargaining agreement covering our flight attendants. We commenced negotiations with the AFA-CWA on September 27, 2021. As of ~~June~~September 30, 2022, we continued to negotiate with the AFA-CWA.

Our dispatchers are represented by the PAFCA. In October 2018, we reached a tentative agreement with PAFCA for a new five-year agreement, which was ratified by the PAFCA members in October 2018.

Our ramp service agents are represented by IAMAW. In February 2020, the IAMAW notified us, as required by the RLA, that it intended to submit proposed changes to the collective bargaining agreement covering our ramp service agents which became amendable in June 2020. On September 28, 2021, we filed an “Application for Mediation Services” with the NMB. We were able to reach a tentative agreement with the IAMAW with the assistance of the NMB on October 16, 2021. Our ramp service agents ratified the five-year agreement in November 2021.

In June 2018, our passenger service agents voted to be represented by the TWU, but the representation only applies to our Fort Lauderdale station where we have direct employees in the passenger service classification. We began meeting with the TWU in late October 2018 to negotiate an initial collective bargaining agreement. During February 2022, we reached a tentative agreement with the TWU. Our passenger service agents ratified the five-year agreement on February 21, 2022.

In ~~May~~August 2022, our aircraft maintenance technicians ("AMTs") voted to be represented by the AMFA filed an application with the NMB to represent our AMTs. In June 2022, we received confirmation that the union election was authorized. The union election is currently ongoing through August 25, 2022.Aircraft Mechanics Fraternal Association ("AMFA") as their collective bargaining agent. Currently, negotiation dates have not been scheduled. As of ~~June~~September 30, 2022, we had approximately 600 ~~AMTs. In the event that our AMTs vote to be represented by the AMFA, our labor costs may increase as a result of any collective bargaining agreement we enter into with the~~ AMTs.

If we are unable to reach agreement with any of our unionized work groups in current or future negotiations regarding the terms of their CBAs, we may be subject to work interruptions or stoppages, such as the strike by our pilots in June 2010 and the operational disruption from pilot-related work action experienced in 2017. A strike or other significant labor dispute with our unionized employees is likely to adversely affect our ability to conduct business. Any agreement we do reach could increase our labor and related expenses.

The Patient Protection and Affordable Care Act was enacted in 2010. A decision in the Supreme Court regarding this law is pending and it may be repealed in its entirety or certain aspects may be changed or replaced. If the law is repealed or

significantly modified or if new healthcare legislation is passed, such action could significantly increase cost of the healthcare benefits provided to our U.S. employees. In addition, the failure to comply materially with such existing and new laws, rules and regulations could adversely affect our business, results of operations and financial conditions.

Airlines are often affected by factors beyond their control, any of which could harm our business, operating results and financial condition.

Like other airlines, our business is affected by factors beyond our control, including air traffic congestion at airports, air traffic control inefficiencies, major construction or improvements at airports at which we operate, adverse weather conditions, increased security measures, new travel-related taxes, the outbreak of disease, new regulations or policies from the presidential administration and Congress, and supply chain disruptions, in particular those causing any inability to obtain, or delays in obtaining, aircraft or spare parts such as engines. Factors that cause flight delays frustrate passengers and increase costs, which in turn could adversely affect profitability. The federal government currently controls all U.S. airspace, and airlines are completely dependent on the FAA to operate that airspace in a safe, efficient and affordable manner. The air traffic control system, which is operated by the FAA, faces challenges in managing the growing demand for U.S. air travel. U.S. and foreign air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes resulting in delays. A significant portion of our operations is concentrated in markets such as South Florida, the Caribbean, Latin America and the Northeast and northern Midwest regions of the United States, which are particularly vulnerable to weather, airport traffic constraints and other delays. Adverse weather conditions and natural disasters, such as hurricanes affecting southern Florida and the Caribbean (such as Hurricanes Irma and Maria in September 2017, Hurricane Dorian in August 2019 and Hurricane Laura in August 2020) as well as southern Texas (such as Hurricane Harvey in August 2017), winter snowstorms or earthquakes (such as the September 2017 earthquakes in Mexico City, Mexico and the December 2019 and January 2020 earthquakes in Puerto Rico) can cause flight cancellations, significant delays and facility disruptions. For example, during 2017, the timing and location of Hurricanes Irma and Maria produced a domino effect on our operations, resulting in approximately 1,400 flight cancellations and numerous flight delays, which resulted in an adverse effect on our results of operations. Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security, staffing shortages, as a result of COVID-19 or otherwise, or other factors may affect us to a greater degree than other, larger airlines that may be able to recover more quickly from these events, and therefore could harm our business, results of operations and financial condition to a greater degree than other air carriers. Because of our high utilization, point-to-point network, operational disruptions can have a disproportionate impact on our ability to recover. In addition, many airlines reaccommodate their disrupted passengers on other airlines at prearranged rates under flight interruptionmanifest agreements. We have been unsuccessful in procuring any of these agreements with our peers, which makes our recovery from disruption more challenging than for larger airlines that have these agreements in place. Similarly, outbreaks of pandemic or contagious diseases, such as Ebola, measles, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine) flu, Zika virus and COVID-19, could result in significant decreases in passenger traffic, the imposition of government

restrictions in service, supply chain bottlenecks or issues, and staffing shortages and could have a material adverse impact on the airline industry. As a result of the COVID-19 pandemic, the U.S. government and government authorities in other countries around the world have implemented travel bans and other restrictions, which have drastically reduced consumer demand. For additional information, see “—The COVID-19 pandemic and measures to reduce its spread have had, and will likely continue to have, a material adverse impact on our business, results of operations and financial condition.”Any increases in travel-related taxes could also result in decreases in passenger traffic. Any general reduction in airline passenger traffic could have a material adverse effect on our business, results of operations and financial condition. Moreover, U.S. federal government shutdowns may cause delays and cancellations or reductions in discretionary travel due to longer security lines, including as a result of furloughed government employees, or reductions in staffing levels, including air traffic controllers. U.S. government shutdowns may also impact our ability to take delivery of aircraft and commence operations in new domestic stations. Any extended shutdown like the one in January 2019 may have a negative impact on our operations and financial results. In addition, supply chain issues have led to delays in aircraft deliveries and negatively impacted our ability to source spare parts and complete maintenance on a timely basis, which could have an adverse effect on our business and results of operations.

If we are unable to attract and retain qualified personnel or fail to maintain our company culture, our business, results of operations and financial condition could be harmed.

Our business is labor intensive. We require large numbers of pilots, flight attendants, maintenance technicians and other personnel. The airline industry has from time to time experienced a shortage of qualified personnel, particularly with respect to pilots and maintenance technicians. In addition, we currently face, and may continue to face, high employee turnover, including with respect to our pilots. We may be required to increase wages and/or benefits in order to attract and retain qualified personnel. If we are unable to hire, train and retain qualified employees, our operations and business could be harmed and we may be unable to implement our growth plans. Since 2021, we have experienced a shortage of qualified workers as the U.S. labor market tightened, in particular shortages of qualified pilots. As a result, our operations were negatively impacted and our labor costs have increased substantially in 2021 and 2022, and we expect to continue to face labor shortages and higher costs in 2023. In addition, COVID-19-related absences have had an adverse effect on our operations, which may have a material adverse effect on our results of operations. These labor shortages may exacerbate other risks described in our 2021 10-K.

In addition, as we hire more people and grow, we believe it may be increasingly challenging to continue to hire people who will maintain our company culture. Our company culture, which we believe is one of our competitive strengths, is important to providing high-quality customer service and having a productive, accountable workforce that helps keep our costs low. As we continue to grow, we may be unable to identify, hire or retain enough people who meet the above criteria, including those in management or other key positions. Our company culture could otherwise be adversely affected by our growing operations and geographic diversity. If we fail to maintain the strength of our company culture, our competitive ability and our business, results of operations and financial condition could be harmed.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchases of Equity Securities

The following table reflects our repurchases of our common stock during the ~~second~~third quarter of 2022. All stock repurchases during this period were made from employees who received restricted stock. All employee stock repurchases were made at the election of each employee pursuant to an offer to repurchase by us. In each case, the shares repurchased constituted the portion of vested shares necessary to satisfy tax withholding requirements.


ISSUER PURCHASES OF EQUITY SECURITIES	ISSUER PURCHASES OF EQUITY SECURITIES							ISSUER PURCHASES OF EQUITY SECURITIES

Period	Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs		Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs
April 1-30, 2022		69	$	26.06	—	$	—
May 1-31, 2022		176	16.94		—	—
June 1-30, 2022		31	21.74		—	—
July 1-31, 2022								July 1-31, 2022	—	$	—	—	$	—
August 1-31, 2022								August 1-31, 2022	1,227	24.48		—	—
September 1-30, 2022								September 1-30, 2022	—	—		—	—
Total	Total	276	$	19.76	—			Total	1,227	$	24.48	—

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable

ITEM 5.OTHER INFORMATION

None

4645

ITEM 6.EXHIBITS


Exhibit Number						Description of Exhibits

2.1						~~Amendment to~~ Agreement and Plan of Merger, dated ~~June 2,~~July 28, 2022, by and among Spirit Airlines, Inc., ~~Frontier Group Holdings, Inc.~~JetBlue Airways Corporation and ~~Top Gun~~Sundown Acquisition Corp., filed as Exhibit 2.1 to the Company’s Form 8-K dated ~~June 2,~~August 15, 2022, is hereby incorporated by reference.

~~2.2~~10.1						~~Amendment No. 2 to~~Termination Agreement, ~~and Plan of Merger,~~ dated ~~June 24,~~July 27, 2022, by and among ~~Spirit Airlines, Inc.,~~ Frontier Group Holdings, Inc. ~~and~~, Top Gun Acquisition Corp. and Spirit Airlines, Inc., filed as Exhibit ~~2.1~~10.1 to the Company’s Form 8-K dated ~~June 24,~~July 28, 2022, is hereby incorporated by reference.

31.1						Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema

101.CAL						XBRL Taxonomy Extension Calculation Linkbase

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)



*			Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise specifically stated in such filing.

4746

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SPIRIT AIRLINES, INC.

~~August 8,~~October 26, 2022	By:	/s/ Scott M. Haralson
		Scott M. Haralson
		Senior Vice President and Chief Financial Officer

4847