- CAPA Analysis
- Schedule Analysis
- Route Maps
- US Route Data
- Annual Reports
- Form 41
- Print Summary
An "ultra" low-cost carrier, Spirit Airlines is based at Fort Lauderdale-Hollywood and Detroit-Wayne County airports. Spirit adheres closely to the low-cost model, operating a single-class fleet of A320 family aircraft, with quick turnaround times, short-haul service and a la carte pricing. Spirit has a heavily north-south oriented network, which a strong focus on services to holiday destinations in Florida, the Caribbean and Latin America.
The airline was listed in May-2011.
Location of Spirit Airlines main hub (Fort Lauderdale-Hollywood International Airport)
Spirit Airlines share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Spirit Airlines fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
511 total articles
65 total articles
As Indigo Partners moves closer to finalising its acquisition of Frontier Airlines and heightens the efforts underway to transition the airline into a true ultra low-cost carrier similar to Spirit Airlines, certain nuances to Frontier’s strategy should prove interesting for Indigo to navigate as it works to place Frontier squarely in the US’s growing ultra low-cost business model. Overall, the ultra low-cost business scheme has so far proven fruitful for Spirit in terms of the carrier’s financial performance; but passengers still bristle about being nickel and dimed even though they are paying base fares lower than most other airlines (even so-called low-fare airlines) by a significant margin.
Headed by former Spirit Airlines chairman William Franke, Indigo was a major owner of Spirit as it began the transition to an ultra low-cost carrier in 2006. As is now well documented, he set the wheels in motion to purchase Frontier earlier in 2013 when he resigned as Spirit’s chairman and Indigo sold its stake in Spirit.
The deal is expected to close some time during 4Q2013; but Indigo has no doubt been plotting a strategy specific to Frontier’s network to ensure the successful execution of the business model change. It is a formidable challenge for a long-standing brand that for a long period of time offered at least some medium frills. Indigo’s biggest challenge may lie in avoiding isolating a loyal Frontier passenger base in Denver that has already endured a number of significant changes since its 2009 purchase by Republic Airways Holdings.
JetBlue’s recent launch of new service from Fort Lauderdale to its southern most destination Lima, Peru, marks an important milestone in the carrier’s strategy in Southern Florida that entails building up Fort Lauderdale to roughly 100 daily departures. Once Fort Lauderdale reaches that point, its strategic importance in JetBlue’s network will be solidified as the carrier penetrates deeper into the Caribbean and Latin America from Southern Florida.
The airline’s expansion from Fort Lauderdale continues unabated during 2014 when it launches flights to Montego Bay, Punta Cana and Port of Spain, further pressuring Spirit and Caribbean Airlines.
JetBlue presently serves two out of the three destinations – Montego Bay and Punta Cana – from other points in its network, so it believes it is executing the expansion from Fort Lauderdale efficiently as highlights its method of “connecting the dots”.
Profit growth of nearly 98% by Spirit Airlines in 3Q2013 was dampened by the carrier’s revelation that it will encounter some cost headwinds at YE2013 and into 2014. These are driven by possible expenses related to an engine failure incident that occurred in Oct-2013, increasing costs due to new flight duty and rest time regulations for pilots and a 22% average growth rate during the next couple of years.
As those warnings cause some uncertainty around the carrier’s unit cost containment, Spirit’s rapid expansion into the continental US during the past few years is resulting in a typical pattern of perhaps strong 1Q and 3Q profits, and 2Q and 4Q performances that do not quite reach the levels recorded in the peak periods. The airline has stated that its 4Q2013 results should be similar to 1Q2013 – when top-line revenue grew 23% and net income increased 31% year-on-year.
Executives at Spirit Airlines often declare that if routes don’t reach profitability within a given time the carrier will yank the service and redeploy assets on a bevy of other routes it has in the pipeline. Now the company is applying that logic to two relatively new routes that have launched within the last year. Service between Dallas/Fort Worth and Houston that began in Sep-2012 is ending in Sep-2013 while flights it launched from Philadelphia to Las Vegas in Apr-2013 are ending in Jan-2014.
Since it began a rapid domestic expansion in 2011 Spirit has quickly eliminated some routes that fail to prove out its business case of reaching break-even or profitability within six months. It ended service from Dallas/Fort Worth to Boston and between Chicago O’Hare and Los Angeles within roughly a year from launch.
At the same time Spirit has decided to shave markets from Houston and Las Vegas, it is stepping up its seasonal service from Dallas/Fort Worth (DFW) to Mexico, reflecting its strategy to use DFW as a springboard into transborder markets similar to its push from Fort Lauderdale to the Caribbean and Latin America that dominated the majority of its expansion during the last decade.
Consolidation - and route reductions and higher fares - in the US market place are creating opportunities for the new breed of ultra low-cost carriers (ULCCs) led by Spirit Airlines, which set out on a path in 2006 to achieve unit costs among the lowest in the market. As Southwest’s costs are beginning to mirror those posted by legacy carriers, Spirit is leading the charge to capture traffic the soon-to-be three big full service network carriers no longer find attractive.
Capacity reductions that have resulted from both consolidation and a revamping of the airline business in North America have also created three distinct business models in the region – full service network carriers, hybrids and ultra low-cost airlines. Strong contenders have emerged in each category. The remaining carriers either need to carve out a new niche or adapt to the new maturity taking hold in the market place.
Shortly after Virgin America reported losses for 4Q2012, FY2012 and 1Q2013 the carrier added to its list of customer accolades by winning the top spot in customer satisfaction from Consumer Reports. It is a pattern that has been repeated throughout the carrier’s six-year existence – constant praise for its innovative customer service and equally continuous elusive profits.
During the last year Virgin America has made changes that it hopes will reverse its string of losses including slowing its growth, reworking its network to withstand seasonal troughs and attaining relief on some of its debts.
Even as the changes are largely in their infancy, sceptics are right to question the carrier’s staying power and how Virgin America fits into the mature US market place.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.