All right, everybody, thanks for joining us once again. We saved the lowest costs until last today. Mark and I are pleased to have Ted Christie, CEO, and Matt Klein, SVP and Chief Commercial Officer of Spirit Airlines here. Before we turn it over to them, or as we turn it over to them, I understand we actually may have a video today. Might I suggest.
No production.
Roll the tape.
2020 was a year like no other. At Spirit, it was an unprecedented year filled with more challenges than anyone could have foreseen, but we got through it together as a family.
We're Spirit Strong!
Our airline remains as strong as ever. Many of the communities we serve needed our support, and we raised over $1 million for the Spirit Airlines Charitable Foundation, and those funds gave us the opportunity to help children, families, and service members in need.
Spirit Airlines stepped up to the plate.
Spirit Airlines stepped in.
Spirit Airlines has stepped in.
Since March, we've operated over 260 humanitarian flights and safely returned more than 30,000 guests back to their home countries. Through our continued partnership with Honor Flight South Florida, this year we did something a little different to make their day special.
One local organization still wanted to make them feel appreciated even during this pandemic.
When the world went into lockdown, our industry did the same. We quickly implemented safety procedures, added new policy, and enhanced our cleaning protocols. We also stood up for social justice and donated $250,000 in flights to organizations advocating for equality.
We are still that same company that takes care of people.
Not only am I making a difference, but I'm making a difference with the company I love.
This year was a big one for our airline. We celebrated our 30th year anniversary. In 30 years of Spirit, we shared some of our favorite stories and took a trip down memory lane.
Ned Homfeld started the company from nothing.
When I started, Spirit Airlines was a box truck with five DC-9s.
It's incredible how much we've done in 30 years as a Spirit family. We also continue innovating to improve the guest experience. In Chicago and New York, we launched industry-leading self-bag drop and biometrics technology with more stations coming next year. 2020 was a year like no other, and despite it all, we continue to deliver amazing service to our guests and stayed Spirit Strong all year long. We are Spirit Strong, and we always will be.
All right, we're back. Thank you, Jamie. Hope you all enjoyed that quick synopsis. I'm Ted Christie, President and CEO, joined by Matt Kline, our Chief Commercial Officer. We've got a few slides that we'll take you through, and then we'll have time, Jamie, for you and the audience to ask us some questions. If you guys could refer to the slide deck on the web, I'll walk you through. Let's skip to slide six. As you saw in the video, we just celebrated our 30th anniversary. It's hard to believe that Ned started the company 30 years ago. Here's a quick snapshot on this slide of what the route network has done.
Clearly, we went from two routes to now we cover widely all of the Eastern Seaboard into the Midwest and Western United States, as well as a growing Latin American presence that we're extremely proud of. A big move from a couple of airplanes to now almost 175 by the end of this year. Quite a story, both in absolute growth as well as the transformation of our business since the changeover to a ULCC type model in the mid-2000s. On slide seven, you'll see our current route network. We are the largest ULCC in the Americas. We serve now 80 destinations. 80%+ of our capacity is in the lower 48, with the remainder being in near-field Latin American, Caribbean, and Central American markets. Those markets, along with others, we heavily serve VFR type traffic as well as leisure. Now, with the recent announcement in St.
Louis, we are now in 24 of the top 25 metropolitan areas in the United States. We do believe that our network is a core strength of ours, especially during the course of this pandemic, being big in large leisure destinations, being big in Florida, being headquartered in Florida, understanding this market that has been where demand is and that has served us well. We believe that will be a big part of our recovery going forward.
Part of the success story here at Spirit over the last four or five years has been the change not only from being relying on our cost structure, which we still do, and relying on our low fare service, which we still do, and the growth opportunity, but has been improving the quality of our business and getting us to the point now where we deliver the best value proposition in the space with low fares as well as the highest quality operation. When we look at what we've done, I take you to slide eight. You saw a little bit of that in the video. We have improved dramatically the airport experience for our guests, starting with on the web and with the mobile application, which is now a very, very highly rated mobile application, 4.8 stars at the app store.
By the time you get to the airport, we now have self-bag tag at all our locations. As you saw in the video, we're first in class at delivering biometric validation self-bag drop. We think that's going to be an extremely efficient move for the business. Guests love it because it's low touch and it's faster. A big improvement there in the quality at the airport. The next slide, slide nine, talks about the onboard product. We debuted our new cabin in 2019, which feels like a decade ago. It included new ergonomically designed seats in our coach product that actually increased the usable leg room by a couple of inches. Your comfort space, the space of comfort, feels even larger than it was before.
We added padding and memory foam to the seats and the Big Front Seat and increased slightly the natural recline of our seats, all intended to drive additional comfort. You can see here, we're going to be deploying high-speed stream-to-seat Wi-Fi, which is now active on 10 of our aircraft and will be fully deployed, we believe, by the end of this year or the beginning of next, which is going to further open up the demand funnel for us. More people will choose Spirit as a result of the availability of that type of product and drive ancillary revenue, which we're extremely excited about.
We go now to slide 10, and you can see one of the core reasons that we were so excited about the value proposition, the improvement of the quality of this business has been this dramatic rebound in the operational reliability of our company from the earlier part of the 2010s to today. You can see last year, we were number one in completion factor, the most reliable airline in the United States, and number three in on-time performance, moving up another step over where we were the prior year. We are coupling low fares, high choice, and high quality. Very excited about the growth opportunity we have and widening our advantage. Not only are our guests noticing that, which we are getting tremendously positive feedback, our guest service metrics have never been higher.
They're at record levels during the course of this pandemic, but we've been receiving more and more external accolades as well. On slide 11, we highlight the fact that we were this year named one of Fortune's most admired companies, only one of eight airlines in the world, one of three in the United States to be named to that list, which is something that I'm extremely proud of this organization about. You really can't say it enough that during this time of distress, we have served our guests better than anyone would have anticipated. That's through the determination and the grit of this team showing what we can do. I think these external kudos are one way that they can see all that hard work coming to fruition.
Let me turn it over to Matt for a little bit, and then I'll wrap it up after that, Matt.
Thanks, Ted. Yeah, if we turn to slide 13, just in the last couple of weeks, we've had some exciting new announcements bringing more value to more guests in more cities: Louisville, Kentucky, Milwaukee, Wisconsin, Pensacola in the Panhandle, St. Louis. Also, expanding this is something we've been working on for a very long time, expanding our footprint and operation in New York and specifically at LaGuardia. We now have a couple of new gates in Terminal A, the Marine Air Terminal at LaGuardia, and we'll be starting service there later next month. Very exciting for us. That's in addition to the gate that we have in Terminal C at LaGuardia as well.
Turning to slide 14, we've added some new cities, but that still leaves us with a very large set of growth opportunities for us. Over 600 large and mid-size market opportunities for us, as well as many, as we call, near-field international opportunities. Given the opportunity set, we're targeting capacity CAGR of 13%-17% over the next five years. Continuing along the path that we've been on recently in terms of our expected growth. Turning to slide 15, our sentiment amongst our guests continues to improve. What we're finding there is demand profile improving. Some destinations are showing a lot of strength for the spring break period that just started. Our survey data is indicating that we have the highest level of consumer sentiment since spring of last year, really since the pandemic took hold.
Even better news than the immediate travel period in front of us is search volumes for the peak summer continue to build, and that search curve continues to lengthen, which is extremely important as we think about demand profiles over the summer moving forward. On page 16, as we talk about consumer sentiment towards travel, the Spirit brand, the sentiment towards Spirit brand continues to get stronger as well. Several of our key brand strength KPIs are at all-time highs. Guest satisfaction and repeat rate is higher than it's ever been. Spirit has the highest brand recognition of all ULCCs in the U.S. Customers, our guests, are recognizing that Spirit delivers the best value in the sky. We can see that at least in one measure, if you think of load factor anyway, as a key metric in terms of ridership and brand acceptance.
Our loads are the best in the industry, and we expect we'll remain very high amongst the best, if not the best in the industry moving forward as well in terms of load factors. Before I turn it back over to Ted, one thing we did on slide 17, we just launched this a couple of months ago, and this is something we've been working quite a bit of time on and talked about our loyalty program for quite some time. We finally, even with the pandemic in full effect, got it out the door. We're very happy about it. Started a couple of months ago. The new loyalty program is redesigned to drive higher revenue and additional value for our guests. It's the fastest way to earn rewards and status. We've changed quite a few key attributes of the program.
The one that I think is probably most important to us is this idea that the loyalty program now matches up with our business model. Ancillary revenue production is very important in our business model. We wanted to make sure that was a key component of the new loyalty program. We are giving our guests, our loyalty members, even more incentive to add ancillaries to their package, their travel before they check out. We are getting lots of great accolades from the media on that as well. Very exciting times in terms of projects and getting this one launched a couple of months ago. With that, I'll turn back over to Ted to finish us off.
Okay. I mentioned a lot of the key components of our business. On slide 19 is the starting point of who we are as an ultra low-cost carrier and a high-efficiency carrier is the cost structure itself. Since 2012, which so happens to be the time that I joined the company, just saying, the cost structure has improved and our relative positioning has improved. I think you should assume that we are going to remain 100% focused on our cost structure and maintaining that advantage, if not widening it over time. This is a key asset of our business. We're very defensive of it. It's a number one initiative around here, which is trying to find ways to be more efficient to deliver seats to the marketplace.
While we face pressures, and they are real, inflationary pressures, the pressures around aging fleet, airport-related cost pressures, all of those things, we combat that with some of our growth and some of our efficiency measures around self-service and technology, along with fuel efficiency that we think will lead us to be in a leadership position for a long time. That is a key component. Moving forward, we acknowledged on our last earnings call that we're starting to ramp our way towards the recovery. As Matt indicated, sentiment towards travel is definitely improving. Case counts are down. Vaccine rollout appears to be working. All of that is leading to definite increases in search activity. I would say that is stretching out longer than it was before. People are actively searching into the summer for travel options.
We're seeing close-in demand for spring break, which is extremely encouraging, especially given our geographic focus in Florida and leisure destinations. Over the next year or so, we're going to be busy ramping ourselves back to full utilization. That means we're actively hiring now. We have new classes for both pilots and flight attendants as well as mechanics and ground personnel. We're retraining folks that were on long-term leave. We're bringing aircraft out of long-term storage and putting them back into service. That's going to take us about a year to get all fully ramped. Once we do and we reach optimal utilization of the entire fleet, we expect that our cost structure will look a lot like it did prior to the pandemic, sub-six, which is where we lived before.
The debate will be how deep into the fives do we go, which will depend on how we're viewing the market, how we're viewing margin, and that can be driven by fleet decisions. That, coupled with our continued robust ancillary performance, we think sets us up nicely to take advantage of the recovery. As you see on slide 21, we always hit you with the punchline that we've done before. These are the key components of our business, but it really can be quickly summarized with low cost, low fares, growth opportunity, and high value. While we still have plenty of work to do as an industry and Spirit definitely to get ourselves back to normalcy, it's good to know that we're starting to see the signs of that recovery and we're feeling like this one definitely has more legs.
Jamie, with that, I'm going to turn it back to you and start hitting us with questions.
Yeah, that's great. Listen, thanks for the overview in the video. It certainly speaks to how you have evolved thus far. I think it was this past weekend that I saw an article that Spirit is now being taken seriously or something like that. It was in USA Today, so it's probably not that relevant. What I want to talk about is, do you continue to evolve from here? That's not arguing that you should, but as one of the old timers in this space, it's been interesting for me to see how other airlines have evolved, thinking about the evolution of JetBlue over time and thinking of the evolution of Southwest over time. How should we expect Spirit to continue evolving, or do you even need to?
Is really the continuation of your snapshot today, obviously adjusting for recovery, is that where you want to remain?
I think it's an interesting question. I think that the growth opportunity and the way we're viewing the market is based on what we know today and what we look like today. At least as a point in time, that would imply that you don't really need to do anything different, that you see the growth opportunity, you see the way the product is deployed. I think that the management team in 2011 would have told you the same thing on their IPO roadshow. We clearly have evolved over that period of time. I think when we think about the strategy of our business, that has definitely evolved over that window of time because we were 35 airplanes back then and we're going to be 170 plus by the end of this year.
I think the next natural evolution for us isn't necessarily around changing the cost structure or the approach to the market, but it's probably around the network and how that network is deployed and how we get full value out of that network because we are significantly bigger than we used to be. We do have point of presence now in places, relevance in places. I think that would be a natural evolution of a growing company. Now, Matt and Bobby Schroeter, our Chief Marketing Officer, and those guys have a ton of creative ideas about how they're going to introduce new products to our guests, make things easier for people to use, which is a big component of who we want to be.
I think communication on board the airplane in the form of Wi-Fi will give us avenues to create revenue opportunity and attachment that we did not have before. Yes, I think there is going to be stuff, but the direct answer to your question is we really do not need to change anything based on what we see in the market today. I just know that we will because that is who we are.
Why let JetBlue have all the transatlantic fun, particularly with now, I'm sorry, with WOW Air and Norwegian out of that market and given the range capabilities and flexibility within the order book at Spirit?
That would be a pretty dramatic change for our product, I think. And not I think, I know. The benefits of the Spirit model are about driving efficiency with high unit productivity. While we enjoy a significant advantage against our competitors from a cost perspective, longer haul international flying is you can generate a lot of ASMs on that type of flying. The unit advantage kind of gets diminished a little bit, to be honest. Part of that is the benefit of the sweet spot that we talk about, about where we fly. The average stage length of our airline is around two and a half to three hours. It works very well in the United States geographically, and it works well for our product. I think that that idea, we do not see that evolution changing necessarily.
We think we need to focus on where we can be the most successful, and the geography that we live in today feels about right.
One of the questions that I've asked some of your competitors this morning, I wasn't kidding, we really did save the lowest costs for last. One of the questions.
I hope it wasn't like the lowest quality guy.
No, no, not at all. If I recall, you asked for this time slot.
Okay, okay. I don't know. I just show up, Jamie. I just do what I'm told, and then.
The question that I've asked a couple others has been, how does the interplay between ultra low-cost carriers and full-service carriers, how does that competitive dynamic change? Does it change as a result of the downturn? Scott Kirby was not picking on Spirit per se, but the observation that he made was that United has gotten back to cash neutrality before the domestic pure plays have. Does not that answer the question as to what the better model is? Without making it personal, why is that the wrong approach? Why is that the wrong answer?
I mean, I didn't know that. I can't speak specifically, like you said, without making it personal to what the individual models are doing. I know there's a variety of different ways people are looking at cash neutrality, for example, because I've seen all the different math exercises and exclusions and what's included, all that stuff. Look, we said from the beginning we're focused on EBITDA production. We think that's the clearest answer. It gives you the best visibility into the company's operating performance. At any given time, in the traditional measure of, when I say traditional, since the pandemic, traditional, none of this is traditional, measure of cash burn, we were cash generative last year in a couple of months, right? What did that tell anybody? Not a lot. Because once things turn back around, they turn back around, and that's what.
For us, it's about the ongoing longevity of the EBITDA production and eventual profitability. If this recovery continues to move along the pace that it's going and you follow us based on our capacity deployment, we feel really good about our ability to generate cash and start turning to profitability very soon. We need the recovery to kick in. Each business has their own model. For the one that we play in, we think we're the best suited. When it comes to domestic leisure, I don't think anyone's going to refute that we're better at carrying that. That's going to be our focus. We're not changing our model here. We still believe in it.
That's actually a really good segue into my next question. Mark, we'll get to you in a second. I'm sorry. Let's see. I want to figure out how to ask this.
Oh, this would be good.
No, no, no, no, no. Continuing on that train of thought about your model and what you're doing, look, the IPO market is starting to heat up. That is a statement of fact, the airline IPO market. We also have a couple of low-cost startups in the wings. You've had a relative monopoly, I would argue, on sort of the ultra low-cost carrier equity market. There has to be some finite appetite. I don't know where that is, but you're going to start being challenged by other management teams being out on the road, saying that their interpretation or execution of the ULCC model is better than yours. When you hear back from one of the shareholders who is pushing back on you because they've just gotten that pitch, how do you answer that?
Assuming that's the pitch. Yes, you're right. I know there's some IPO activity in the marketplace. I think it speaks, by the way, to what we've said since this company went public, which is there's a tremendous up in this market. It shouldn't shock anyone that that's where the growth is coming. I think that's validation of that fact and that it's finding investment dollars probably validates that even further. As we just showed on our slide, we think the market opportunity for Spirit's bigger than it was when we went public. I think there is a tremendous opportunity here. To your direct question, which is to the extent that we get that we're competing for space or equity dollars or whatever it is, I think we have to line up the facts.
Whatever those are being presented as, we would line up our share of them as well. Based on what we know today, the cost structures of the ULCCs are all right around each other. We're a little bit better sometimes. The other guys are a little bit better sometimes. The third guys might be a little, but everyone's basically kind of settled into an area that's very similar. I think the ancillary productions, again, very good across the space. Sometimes ours is a little better. What you're finding is that they're all kind of triangulating because the model works and it looks and feels very similar. Once you get past that, you've got to look at the quality of the operation. You've got to look at the network strength, and you've got to look at the value of the brand and whether or not those things can.
I think we line up well there today. For me, it's just about the facts. I think when we line all that up, I like our pieces. I like where we're situated, and I wouldn't count us out. I think that we should enjoy a leadership position there.
Good. Thank you for that. Mark, I'm going to check the incoming questions. Why don't you ask a couple of your own?
Chad, I guess can we reach into the way back machine, take off your CEO hat, put on your CFO hat from days gone by, and just talk about sort of how you think about funding the business, right? Because you've done a loyalty deal. You've had success with that. You've had success with EETCs . You've bought planes for cash or done sale- lease backs and so forth. When you think about the mix going forward, given what you've done and what you've learned over the last year, how should we think about how you're going to approach that?
Yeah, I mean, it's been amazing to think back on the transformation of the company's capital position as balance sheet over that window of time too, because a lot of difference and a lot of things have happened in the last year. As we evaluate capital needs going forward, they'll resemble what our capital needs were in the prior pandemic. The primary objective here, get to cash neutrality, start getting to profitability so that you're not funding losses, right? When you look at what you need capital for, for us, it's aircraft. It's really just growth-related assets. I think we would tap a variety of those markets again based on what the needs of the business are, what our relative liquidity position is.
You've heard our CFO today talk about the fact that we probably shy towards sale and lease back financing in the near term because it tends to be a little bit, it's 100% financing for now, and then maybe we shift back to more debt later on. Look, we're careful about the lever here. Admittedly, we've had to crank it during the course of the pandemic. We've also had to issue equity and quasi-equity in the form of a convert. We're going to be careful about the company's debt burden and making sure we manage that because we don't, and we've been thoughtful about that during this period. That's why we did the equity we did, because we didn't want to squeeze our growth opportunity.
Once we get back to normalcy, we're going to be consuming capital like we were before, which as a growth airline is notable, but it's just growth assets. It would feel more run rate to me. First step, get back to cash generation.
Just on the sale lease back, I get it. It's 100% financing, and you have that sort of residual value put back to the lessor. If you look at what you could do, say, in the EETC market, you can probably still get on your cost 90% financing or something like that at the end of the day, and the cost is so much lower. Do you really value that sort of operating lease flexibility and having that residual value and the ability to sort of manage the fleet through lease expiry? Is that something that has tremendous value for you?
It has some. Lessors are valuable partners for the right reasons, not just the 100% financing, but they do, in theory at least, have residual risk that they're willing to manage because of the breadth of their worldwide network. They have tax appetite that they're willing to price in that may or may not be the same at the airlines in any given spot in time. They definitely bring things to the table. Mark, to your point, to the extent that that does not eclipse the value of a public bond or a private bank deal, when we take into account the cost of our own equity, which we would be putting down in the airplane, we may change our decision based on that.
I think when we get back to normalcy, we're going to have all of those options available to us, and we'll just pick the most cost-effective using all those inputs.
Just one final question for me on this topic. I'll turn it back to Jamie. When you look at the deals you're getting from the lessors right now, where are we versus sort of pre-pandemic? Obviously, last April, May, June, right, you had to pay a lot, right? They were sort of rescue financings and so forth. Have we come all the way back where you're getting the same deal that you were getting in fourth quarter of 1999 or of 2019?
We're in the process of evaluating financings for our next year, for 2022, I guess, at this point. We're active with that RFP right now. I don't know that I could say for sure how things have trended, but based on my conversations with the marketplace, it does feel like those lease rates are getting attractive for the lessee. There's been a lot of activity in the lessor space of late too. I'm not quite sure how that disrupts things, but it does look like that could be a very attractive form of financing for us that would then compete against what you and I talked about earlier, which is can it still beat the debt deals to the end game?
Okay. Great. Helpful. Thank you. Jamie, back over to you.
Gentlemen, I got a question from the audience here in response to what you were saying before about the size of the overall market here in the U.S. If we look at Europe, the ULCC share there is materially higher than here in the U.S., despite the fact that we deregulated before they did. Why is that? Is European ULCC share an appropriate proxy for the future of the U.S. domestic market?
I think it's a proxy insofar as it's an input, meaning it's one of the measures. At my last count, and I stopped tracking all that stuff, I want to say that they represented 25%-30% of the European market. It's somewhere in that neighborhood. We're about 8% here or 8%-10%. I think there are differences between the two. While they are both the most mature aviation spaces, and they have similarities in unit revenue and that sort of thing, there are clear differences. Europe, for example, has a competitive rail product that the U.S. really doesn't have that in theory would depress ULCC availability. The U.S. has a very developed middle cost carrier like Southwest that's big and has wide reach and is lower cost than the high cost carriers. Europe doesn't have that, for example.
I think there are kind of puts and takes going either way. For that reason, it's at least a proxy to say, is there growth opportunity? That would lead you to a yes. What's more important is to look at the data happening in the United States. The way we evaluate markets is the same today that it was in 2006, 2007, 2009, 2012. With that same measurement, the market opportunities have gotten larger. You may ask, why is that? How can that possibly be? Our cost structure has gone down and fares have gone up. When those two things happen, there's more opportunity. That's really the best answer as to why we feel good about it.
That's probably a good segue into another question. There is a debate whether a high fuel environment is a positive for low-cost carriers or a negative. What is Spirit's current thinking in this regard?
Yes to both.
You hear it on both ends. Everybody says all fuel scenarios are good or all fuel scenarios are bad.
Exactly. That's why I kind of jokingly referred to it as because we'll always tell you whatever environment we're in, we'll tell you that. I think that the answer is fuels move considerably, move quickly here over the last 60 days or so. I think in the near term, that hurts. I think that that's bad for airlines because revenue production can't catch up, even in a normal environment, if it moves like that. It squeezes the margin. However, as I mentioned in my discussion around cost, fuel burn is a real advantage of Spirit. We have that advantage today, and we think it's going to widen. To the extent that that fixed expense continues to elevate, we can offset some of it because of our efficiency and because of our density that higher cost carriers have a problem with.
You could argue that it does improve the advantage and widen the opportunity for us. I think if you looked at the earlier part of the 2010 decades when oil was elevated into the $100 barrel range, Spirit was growing profitably back then and doing very well. I do not want to play both sides of the coin and say we like it both ways. I think the cash generation guy in me today would prefer it to be lower, to be honest. I think over the longer term, it can provide us with an advantage given our fuel burn advantage.
Another one. You currently have no fares loaded past Labor Day, and that's less than half of a normal scheduling period. What data are you looking at before you push further out and try to adjust capacity and capture future bookings? Do you think you may be missing out on recent trends in pent-up demand for those looking to travel past summer? It sounds like you have a very disgruntled passenger who's trying to book something for Halloween. How do you respond to that? You're leaving money on the table?
The good news is you don't have to listen to me on this answer. I'm going to let Matt go on that one.
Generally speaking, we have our schedule pushed out anywhere from, say, five to eight months in advance of travel. Sometimes you push a little further out depending on the season. We are definitely in a period now where we'll be extending the schedule out soon. For us, we're not as concerned about trying to go capture one incremental booking, say, out in Thanksgiving right now. That demand will be there. This is something that we have had in place for a long time. We'd rather make sure that we get the revenue plan set correct based on what we think demand expectations will be. Grabbing one more low-yield booking far out doesn't really achieve much. The worst thing we could do is sell what could have been a higher-yield booking too cheap further in advance. We take a relatively risk-averse approach towards the future schedule.
That's no different now than it was pre-pandemic, actually.
That would have been my answer as well. I mean, it pays in terms of yield to wait, in other words. Is that fair?
Generally speaking, that's correct. Yes.
When you were talking before about, actually, let me just follow up. Are you seeing any inflection in the booking curve, looking at anything meaningful?
Oh, yeah. Absolutely. Especially compared to recent history. We've been seeing really a change occur about a month ago, right after Presidents' Weekend . We started to see a lot more search activity begin. We believe it's directly correlated. It's an inverse relationship to case counts coming down. As the case counts came down and now have plateaued and continue to go down, and hopefully vaccination penetration continues to go up, that leads to more positive sentiment, which then leads to more search activity that then leads to more booking demand. We are relatively pleased with what we're seeing here in the back half of March. Easter's booking fairly well. On a small sample size, we're seeing good traction out in the summer. Again, it's a small sample size, so we have to be a little careful in how we interpret all of that.
It certainly would match up to our expectations that as we move through spring and get closer to summer, we should see a change. I think we're starting to see that now.
Remind me, did Spirit participate in the domestic fare initiative that was earlier this week or late last week?
Jim, that's always a great question for us because we're constantly updating fares, either up or down based on demand trends. We saw the fare increase go through by the industry. We increased fares where we felt it was appropriate for us to do that. In some cases, fares went up $10. In some cases, fares went up $5. We certainly did participate where we felt it was appropriate for us.
A last question as we come up on our hard stop here, gentlemen. Ted, you were talking about the model and the potential evolution in response to my question before. All I could think of was, wow, these guys will never operate a second fleet type. That is coming off. We had Southwest on before you, and I am sure you have seen the recent articles. They are backing away from the Airbus product. Looks like they are going to do a MAX 7. Is my interpretation correct? I mean, is there a circumstance under which you would embrace complexity?
The hurdle is high. We sort of answered that question at the end of 2019 when we ran a full campaign and we ordered 100 more Airbus aircraft. I would say that you could not definitively say never. Because complexity is not linear, there are shades of it. For example, we operate a single engine variant today. That may or may not necessarily have to be the case always, right? I think there are ways to get past the cost of that complexity. We would always entertain ways to do that, and it is possible. I think the hurdle is higher because of that.
All right. That's great. An on-time arrival. Gentlemen, thank you both. Look forward to seeing you in person soon. Really appreciate you once again being part of the JP Morgan Industrials Conference. On behalf of me and Mark, thank you very, very much.
Thank you, Jamie. Thank you, Mark.
Thanks, gentlemen.