Spirit sees slumping demand in the Caribbean
Megan Kuhn, Washington DC (23Jun09, 22:51 GMT, 359 words)
Spirit Airlines' visiting friends and relatives (VFR) traffic could take a hit in the Caribbean next year as the economic downturn continues.
The airline serves 24 Caribbean and Latin American destinations, and a large portion of Spirit's passengers in the Caribbean and system-wide are a mix of leisure and VFR.
While Spirit's leisure and VFR traffic has not been immune to the economic downturn, the impact could worsen.
Passengers in the VFR sector are still flying to the Caribbean at this point, but a slowdown in the segment could happen in the next 12 to 24 months, Spirit senior vice president and chief marketing officer Barry Biffle tells ATI.
As for leisure travellers, those who visit the Caribbean on a yearly basis will continue to fly to the region, but they will not spend at the same level in 2010 as they did in 2007 or 2008, Biffle says.
In the meantime, Spirit is seeing year-over-year softness in both transcontinental markets such as Fort Lauderdale-Los Angeles and leisure destinations, particularly Myrtle Beach, South Carolina. Spirit links Myrtle Beach year-round with Detroit, Boston and its Fort Lauderdale hub.
Myrtle Beach in the past has positioned itself as a cheaper family vacation destination compared with Orlando, Biffle says. But as Orlando and other cities such as Las Vegas have reacted to the downturn by reducing room rates, pressure has increased on Myrtle Beach and similar markets, he explains.
As a result, Orlando and Las Vegas bookings are "doing great", Biffle says.
But while the economic downturn does not appear to be getting worse, it does not mean it is improving, he cautions. As a result, Biffle does not predict system-wide demand returning to 2007-2008 levels anytime soon.
However, Biffle expects the low-cost carrier's 30% to 40% cost advantage over the majority of its competitors to carry it through the recession. In addition, he does not see the downturn as carrying only bleak news for the airline.
Spirit has seen some improvement in business traffic, which is typically a small segment for the carrier. Most of the increase is from business travellers responsible for purchasing their own tickets a Spirit spokeswoman says.
Source: Air Transport Intelligence