Spirit cancels services ahead of pilots strike
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Spirit Airlines: still in the early phases of adapting to new competitive realities in the US
During the past year the US ULCC Spirit Airlines has been working to define itself in a new operating environment where it is no longer ignored by its larger rivals. The shifts undertaken by Spirit have included a minor pivot to smaller markets. They have also included its efforts to improve its operational performance to compete more effectively with large airlines that are in the process of using new fare classes to withstand the competitive threat posed by ULCCs.
In many ways Spirit remains in the early phases of crafting a strategy to address new market realities in the US, and progress is difficult to ascertain. Over the course of the past year, when the airline began undertaking changes to adapt to changing competitive realities, pricing in the US market sagged, with collective industry unit revenues plunging.
With the industry likely to return to positive unit revenue during 2017, Spirit’s performance and execution of its strategy to sustain itself as the leading ULCC in the US market place will be scrutinised. Comparison of Spirit’s historical performance in some financial metrics will reflect the new realities in the US market.
China-US air growth slows as Xiamen Airlines flies Fuzhou-New York, making the world a smaller place
The world becomes a smaller place on 15-Feb-2017 with the launch of Xiamen Airlines' Fuzhou-New York JFK service. The route is a not a headline grabber like the ultra long hauls of Singapore-San Francisco or Doha-Auckland. But linking the two cities brings a nonstop flight to what is, by some calculations, the largest unserved trans-Pacific market.
The new flight reflects on current themes in the market between Asia and North America: the growth from China's secondary cities, more Chinese airlines being catapulted onto the world stage, and impacts to one stop competitors.
Fuzhou-New York will initially be only flown three times a week, supporting competitors' retorts that they have a frequency advantage – or at least for now. Competitors have also claimed a better product, but Xiamen's 787-9 is China's fifth widebody to offer direct aisle access business class. Soft service is catching up, and likewise for commercial planning: Xiamen's 787-9s do away with first class. This report looks at the growth of China and the rest of Asia to North America as growth momentum slows with China's bilateral capacity being reached.