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Was I Wrong to Doubt This Company?

http://www.fool.com/investing/general/2013/02/19/was-i-wrong-to-doubt-this-company.aspx

Brian Stoffel
February 19, 2013

At the beginning of 2012, I called out ultra-low-cost Spirit Airlines (NASDAQ: SAVE) as the company I would be avoiding at all costs. Well, since then, the company's stock is up 27%, besting the S&P 500 by about 5 percentage points.

Today alone, Spirit's stock is up as much as 7% on earnings being released. Read below to see if I've changed my tune about the airline, and at the end, I'll offer access to a special free report on our top stock for 2013 here at the Motley Fool.

First, just the facts
Coming into the company's fourth-quarter earnings announcement, expectations were relatively low. Hurricane Sandy had wreaked havoc on a number of different airlines, and both revenue and earnings were expected to drop from previous estimates as a result.

Spirit came out this morning and reported a $0.03 beat on earnings, and healthy revenue growth of almost 20%. That, combined with the fact that the company is rapidly expanding its footprint across North and Central America -- adding 27 new routes between October 2012 and June 2013 -- meant investors were more than happy to buy up shares today.

I haven't liked this model from the start
There's no doubt that ever since the turn of the millennium, airlines have been doing all they can to increase revenue. This has primarily taken the form of fewer on-flight amenities, and charges for checked baggage.

But Spirit has taken "optional fees" to a ridiculous level. On a round-trip flight, you could pay up to $20 just for an agent to print your boarding passes; $200 for two carry-on bags; $200 for two checked bags; $3 for a glass of water... the list goes on and on. See if you can figure it all out at their