Frontier Airlines announced (14-Sep-2009) plans to launch a number of services:
Frontier launches new services from mid Nov-2009
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Allegiant Air faces new competition from US ULCCs as fleet and labour deals drive some cost creep
Niche US ULCC Allegiant Air should be embarking on a period of greater stability after reaching an agreement with its pilots and completing a safety review with the US FAA. The airline also recently placed its first order for new aircraft with Airbus, which will help to accelerate the retirement of its ageing MD-80s that are creating reliability challenges for Allegiant.
Although the pilot agreement and aircraft deal will drive long term benefits for Allegiant, the airline faces some cost pressure going forward from increased labour expense and inefficiencies in operating more than one fleet type. As it braces for some cost inflation, Allegiant is also facing increased competitive overlap with fellow ULCCs Frontier and Spirit, which reflects subtle changing dynamics in the US domestic market.
For the moment, the overlap between Allegiant and other ULCCs remains small. But the likelihood of increasing competition is strong as the opportunities in medium sized markets created by consolidation among the US’ largest airlines continue to grow.
US airlines and the Cuba route awards Part 2: Cuba's smaller airports face a major influx
Now that US regulators have made their decisions on service awards for Cuba, the airlines must now prepare to serve a country with unique challenges – ranging from airport infrastructure to hotel room availability. The significant hurdles have not quelled excitement over the re-establishment of scheduled airline services to Cuba, which will resume later in 2016.
Aside from the closely watched contest to win service to Havana, the US DoT also awarded service rights to nine other secondary Cuban cities and, not surprisingly, South Florida features prominently in those route assignments. Gauging accurate levels of demand in those markets could take some time to determine. With a 50-plus year absence of scheduled airline flights between the US and Cuba, there is no up-to-date data from which to measure demand patterns.
Although Cuba holds much promise, an ample level of guesswork will be necessary as airlines navigate dealing with the Cuban government in order to ensure a smooth service launch. Some level of passenger education is also necessary in order to create the right set of customer expectations for travel to Cuba.
(This is Part 2 in a series of reports examining route awards between the US and Cuba. Part 1 focused on awards rights from the US to Havana.)