US ULCCs evolve revenue management while keeping costs in check
From CAPA Americas Aviation Summit:
Although it seems like they've been a mainstay in the region much longer, ULCCs in the Americas have only been a force for a little over a decade as Spirit began transitioning to the model in 2005, which was around the time that Volaris and VivaAerobus were pioneering the model in Mexico. Frontier has joined Spirit in the US ULCC space after transitioning to the model during the last couple of years. VivaColombia made its debut in 2012 followed by JetSMART in Chile during 2017.
There are no doubt cardinal rules all those airlines live by - a stringent focus on cost, high employee productivity and maximum asset utilisation. But those airlines also understand they need to evolve within that framework, and some of that evolution is occurring in revenue management as the focus on generating higher total revenue continues to evolve.
For Spirit Airlines specifically, part of its pivot during the last couple of years is a focus on shoring up its operational improvement and net promotor scores while maintaining the crucial cost metric for ULCCs -- a unit cost excluding fuel of USD6 cents or less.
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