Mad Money

Cramer: This Airline Profitable Every Year Since 2007!

Could Spirit Airlines Start Soaring?

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Last week Cramer said that his opinion had changed broadly on the airline sector – that he was bullish for the first time in well over a decade.

He said the wave of consolidation in the industry should benefit that had otherwise struggled to turn a profit.

That remains the case.

However, on Wednesday's broadcast Cramer also said there's an airline that might not have needed that kind of powerful catalyst.

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"I'm talking about Spirit Airlines, (TICKER: SAVE) a small, ultra-low-cost, no-frills operator that has racked up an incredible track record," Cramer said. "The airline has been profitable every single year since the economy peaked in 2007, including when oil prices spiked to $147 a barrel, and when business travel went into a horrible recession."

How does Spirit do it?

"Back in 2005 the company brought in a new CEO, Ben Baldanza, and he restructured the airline so that it could make money in just about any environment," Cramer explained.

Photographer | Collection | Getty Images

Following are a few examples of the improvements.

Efficiency: "Currently Spirit has 45 planes, and they use those planes more efficiently than the competition, keeping them in the air 13 hours a day, versus 12 hours for JetBlue or 10.5 hours for Southwest," Cramer said.

Capacity: "The company outfits its planes with more seats than the competition—in a Spirit Airbus A320 there are 178 seats, versus 150 for JetBlue, so you have two pilots burning the same amount of fuel, paying the same landing fees, but Spirit can carry 28 more people. You get less legroom, but the ticket price is also much, much lower," Cramer said.

A La Carte: "Plus, unlike other airlines, Spirit unbundles everything: if you want to check your baggage, you have to pay extra for it, same with buying food and drinks on board the plane," Cramer said.

As a result, Cramer thinks the company is firing on all cylinders.

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Also, "Spirit has a clean balance sheet with no debt and $400 million in cash—incredible for an airline," he said.

"It's also a growth story, as the company plans to grow capacity by 21.5% year over year in 2013, and they could triple the number of planes they have before they saturate the markets they serve."

What's the bottom line?

"Although the stock has more than doubled since it came public in May of 2011, it's only trading at 11 times earnings and I think it has more room to run," Cramer concluded.

Call Cramer: 1-800-743-CNBC

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