At long last, Spirit has released its monthly operating reports for December and January. It’s been three months since the dreadful November report was released, and I could only imagine doom and gloom was to come. But you know? It wasn’t that bad. Don’t get me wrong… it wasn’t good, and things may very well get worse. But just looking at the straight numbers, things have improved since November. Then again, the massive schedule cut filed this weekend is a harbinger of… nothing good.

Before we get into the weeds, let’s talk about operating margin. December was particularly good for Spirit. I shouldn’t say that. It was relatively good for Spirit. January fell off further, but that is not in any way a surprise. January is always worse than December since you only have a few days of holiday travel that month.

Spirit Operating Margin by Month

Now, you’ll remember that November was the first month when the new, much smaller Spirit made its debut. Despite a small bump in capacity around the holidays, it stayed relatively flat until early spring break began in Feb.

In other words, the performance in December and January finally has a baseline to compare against, using the November data. To start, let’s look at the cost side of the equation. There is some wonkiness in here.

Some of the December numbers look like cost timing issues. For example, landing fees were off more than a quarter compared to November, but they bounced right back up in January. Aircraft rent went in the complete opposite direction, with December seeming oddly high. This would smooth out when looking at quarterly numbers, so we just have to take the choppiness as the way things are going to be.

There is one big cost issue we need to address. I noticed that after November salaries had dropped only 7 percent from October, December salaries were relatively flat. But that then plunged by 17 percent in January. I imagine there was something around the timing of severance combined with when people left that delayed the cost benefit of the reductions in the business. So, January is probably more indicative of future months, but we really don’t know what the steady state will be yet, especially since more cuts are coming.

There is a fair bit of noise in these numbers, and there’s not much we can do about that other than speculate.

On the revenue side, December was a solid improvement, but there was backsliding in January. All that being said, every month is still a far cry from the horrendous 8.2 cent unit revenue in September. After November came in at 10.0 cents, December surged to 11.1 cents while January fell back off to 10.2 cents. But, as unit costs come down as the old Spirit sheds its excess cost base, the margin should improve further if unit revenue can stay up.

So, that’s the good news, and it’s not even that good because the airline is still losing money. Now, for the bad news.

The operation has completely fallen off the rails. In November, Spirit canceled 2.1 percent of flights. That rose to 3.3 percent in December and 6.5 percent in January. Canceling that many flights does help a little in the sense that you consolidate people from those canceled flights on to your other flights, helping boost revenue on the flights that operated. But it also erodes any trust in the operation that existed, and it pushes more people away, especially those who want to pay more money for that new premium-ish product.

For what it’s worth, things have not improved since then. February looks like it was a point or so worse while March is on track to erode even more, closer to 10 percent, or just under it. This is not a healthy airline, operationally speaking.

Of course, we haven’t even touched on the 800 lb gorilla… the war in Iran and rising fuel costs. None of that is reflected in any of these numbers. We won’t see that even start to be reflected until March, but when it hits, it’s going to push Spirit ever closer to that ledge.

This weekend, the airline cut another nearly 20 percent of capacity in May to mid-June, spread across the network. It’s possible some of this is just lining up future schedules with the reduced fleet even better, but let’s just take it at face value. The airline is trying to shrink, shrink, and shrink again until it finds profit. That is not easy to do.