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Despite oil, bullish about summer: Spirit CEO
Oil prices are edging up, but Spirit Airlines (NASDAQ: SAVE) can weather those higher costs better than most airlines, its CEO said Monday.
In fact, he's "very bullish" about this summer.
"When fuel prices go up, our ticket prices don't need to go up as much as other airlines' to cover that fuel," Ben Baldanza said in an interview with " Closing Bell " from the eMerge Americas tech conference in Miami.
That's because Spirit has more seats on its airplanes and therefore the lowest fuel burn per seat of any airline in North America, he said.
"We're watching fuel right now. It is ticking up a bit. But we don't think it's going to significantly dampen summer travel."
Read More The gifts of the gas pump that keep on giving
Both Brent (Intercontinental Exchange Europe: @LCO.1) and U.S. crude (New York Mercantile Exchange: @CL.1) rose almost 20 percent last month. The market had been in a rout since June, when prices fell about half from peaks above $100 per barrel.
Baldanza said Spirit is seeing a lot of demand thanks to its cheap ticket prices. He expects the budget airline to continue to grow and produce top margins.
"This year in the first quarter we had over 22 percent margin. And as we grow we believe we can maintain really high margins," he said.
"How high is going to depend somewhat on fuel prices. But we're a growing airline and for the next five years, we've got a 20 percent growth rate pretty much locked in. And we expect earnings to grow sort of with that."
Read More Beware, oil rally is 'premature': Analyst
Last week, Spirit reported first-quarter profit growth in line with Wall Street's expectations. It earned $69 million, up 83 percent from a year earlier. Adjusted net income was 96 cents per diluted share, in line with analysts' average estimate, according to Thomson Reuters.
-Reuters contributed to this story.
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