David Puddy

Is the A319 effective for thin markets? Previous Delta CEO didn’t think so. Obviously you would need a large fleet number to spread the costs, but if an A220 has a 25% CASM improvement vs the A319, and it provides route flexibility, perhaps it should be considered. Large fleet deals generally command lower per-unit costs (negotite lower purchase prices). Plus, unless Spirit wants to compete with UAL, AA, Allegiant, Easyjet and many Chinese carriers for used A319/20s, ordering new airframes will be difficult considering the NEO order backlog. More expensive leasing becomes another option.

Point is, both the E2 and A220 have shallow order backlogs for now (both JB and Moxy see the value) and claim to offer 25% improved efficiency. No doubt Spirit management has to weigh “single fleet efficiency” vs the availability of more fuel efficient types that require a switching cost/complexity. There are trade-offs to consider. If a certain revenue growth rate must be achieved going forward for the stock valuation, fleet decisions will need to be made. Currently the E2 has few orders (significant availability) and the A220 is still reasonably available - although it is gaining more and more orders (which is good for training and maintenance costs/availability).