US ultra-LCCs Frontier Airlines and Spirit Airlines are each on track to double in size and their CEOs see plenty of space in the market to accommodate that growth.
Speaking on a panel at Routes Americas 2021, Frontier president and CEO Barry Biffle (pictured, center right) and Spirit president and CEO Ted Christie (pictured, center left) were optimistic for their airlines and for the travel industry.
They told panel moderator Vicki Jaramillo (pictured, far left) , senior director marketing and air service development at Orlando International Airport, that the leisure markets they focus on are returning fast, despite some stops and starts through the pandemic crisis.
Both airlines operate all-Airbus A320-family fleets. Denver-based Frontier has just under 110 aircraft today and another 150 on order. Biffle said the company’s 10%-20% average growth rates will continue. Fort Lauderdale, Florida-based Spirit has 160 aircraft today and another 160 on order. “There’s a massive opportunity for them,” Christie said.
Even with US startups like Avelo and Breeze Airways launching this year, Biffle said the US low-cost market is more than large enough to support growth. He pointed out that all US LCCs combined make up just 10% of the entire US market compared with Europe, where LCCs account for around 50%. “There’s plenty of space,” he said.
US Travel Association president & CEO Roger Dow (pictured, far right), another panelist, agreed, saying pent-up demand for travel was “huge.” He was also optimistic for the return of business travel in the latter part of this yer.
But there are challenges, not least a shortage of labor that is affecting the travel industry generally as it ramps back up—including hotels and restaurants—as well as the aviation industry specifically with flight and ground crews. Biffle said the shortages “are real” and noted that TSA “is hit as bad as anyone.”
Christie agreed it was a “seller’s market” but said Spirit had prepared well in advance and was “looking in good shape” labor-wise for the summer and fall.
Asked about hub fee charging methodologies, Biffle advised airports to “stop charging by weight and start charging by movement.” A smaller aircraft like a regional jet takes up the same space as a narrowbody, he said, but brings fewer passengers.
“More passengers will get you [airports] more concessions and more economic activity,” he said. “Stop putting a 37-seater in there when you can put a 200-seater.”
Christie agreed. “Asset utilization is what our business is all about,” he said.
Another challenge to air travel growth is getting COVID-19-related restrictions lifted, especially in international markets. Dow said governments were looking for the “perfect solution” with zero cases of virus transmission. “Perfect is the enemy when it comes to governments. They need to learn to live with this.”
Biffle compared how the US Department of Transportation (DOT) approaches risk versus the Centers for Disease Control (CDC). “DOT knows that travel by automobile is dangerous, now that’s why you have inspections, licenses, seatbelts and other things. The CDC would say, ‘no travel, stay at home, driving is dangerous.’ Traveling on airplanes is one of the safest places you can be.”
Biffle also urged everyone in the air travel industry to set an example. He pointed out that he would be traveling to a different city each day that week. “If you aren’t out traveling, well who is?” he asked. “Lead the way!”
Photo credit: Craig Huey