Originally Posted by
Lincoln Osiris
I still don’t see it happening. To my knowledge no ULCC in the world has added a second fleet type and for good reason, Its expensive. You would think in Europe of all places it would make perfect sense yet EasyJet and Ryanair won’t touch it. Heck even Southwest doesn’t have a second fleet type and they fly everywhere, especially small and mid sized markets.
Good points. Europe, however, does have a lot more slot restrictions that also make higher capacity airplanes more critical for breakeven. We don’t see that as much here in the States - at least for now...
But there are 2 other costs to consider beyond mixed fleet complexity costs: financing costs and general operating costs. If the financing/order costs are compelling with a volume deal (especially with Embraer’s desperation given JB’s jump to the CSeries) and general operating costs of the E2 or CSeries are far better than an A319 or even an A320, then a new fleet type would at least be considered. No doubt the efficiency gains and new market potential would have to far outweigh the new fleet complexity costs to be compelling.
That said, how will Spirit maintain its growth into the longer term without new aircraft orders and new market growth? I guess a merger with F9 could be one path since they already have a big Airbus order. I would think avoiding direct competition with the other LCCs and Legacies and entering smaller or midsized markets with more efficient airplanes would be another route. Slugging it out with SWA, JB and F9 daily on large-city competitive routes (ie Chicago to LA or LGA to FLL) probably won’t be a winning strategy - there’s too much competition and capacity and not enough margin. Instead, Spirit could enter more midsized markets like ACY and MYR with less direct LCC competition. Think about it, without regional feed, SWA doesn’t access more than half of the country’s flying public, and the 700 is not a low CASM airplane. So, the trade off becomes sacrificing midsized market growth opportunities for a simplified fleet. The A319 is not an optimized airplane for smaller growth markets - so, another aircraft with better technology and lower CASMs should be considered if Spirit wants to enter more high-growth midsized markets (ie more direct flights among midsized markets).
Obviously a lot to consider. Spirit needs to continue to profitably grow in order to satisfy investors. Will be interesting to see if a deal can be made.