Spirit Mulls Adding Smaller Jets
 

https://www.bloomberg.com/news/artic...l-airbus-fleet

April 17, 2018, 9:51 AM EDT
Spirit Airlines Inc. is considering adding smaller planes to its fleet of Airbus SE jets as the carrier looks for ways to expand its service.

The ultradiscounter expects to seek proposals from planemakers “shortly,” having completed an evaluation of the options, Chief Commercial Officer Matt Klein said in an interview. He declined to say when the airline might make an order.

Adding smaller planes, such as those made by Canada’s Bombardier Inc. or Brazil’s Embraer SA, would further Spirit’s goal of adding flights from midsize and smaller cities to popular tourist destinations. The airline already has plans to expand its fleet of Airbus A320-family planes to 161 by the end of 2021. Spirit had 112 of the single-aisle planes at the end of last year.

“We feel like there are some route opportunities that are not being properly served today,” Klein said Monday at the CAPA Americas Aviation Summit in Houston. Any aircraft choice would need to let the airline maintain the lowest cost structure in the industry, he said.

The evaluation could mean more planes from the Airbus A320 line, which comes in a range of sizes. Boeing Co., which makes the 737 family of jetliners, also is in the running. Spirit has said it wants to increase capacity by as much as 15 percent next year and in the low to mid-teens over the following several years.

Spirit’s planes now seat between 145 and 228 passengers. Bombardier’s CS100 can carry as many as 135 and the CS300, up to 160. Embraer’s E190 E2 can accommodate as many as 114 passengers, while the E195 E2 can seat a maximum of 146.

How about a A319 NEO? Why on earth would spirit incur the costs associated with adding a new fleet type. It's very costly and difficult.

Difficulty procuring Airbus slots.

Yeah, good point. I would have thought that opening the A320 production facility in the U.S. would have helped the backlog more, but I suppose the biggest factor is the slow rate of engine production. I understand both NEO engines are struggling to keep up with demand.

The engines are an issue, but actual production slots are the problem. Their order book is spoken for. I’m sure some leasing companies have some slots for sale. Are those slots priced at an acceptable rate, and are there enough of them to meet Spirit’s needs?

Should fit the budget since we have a cost neutral contract.:cool:

Makes complete sense. The CS300 has a lower CASM than both the A319 and the A320 (legacy versions) and it can accommodate up to 150-160 seats. With Airbus buying 51% of the CSeries program from Bombardier, I imagine we’ll see some joint offer at some point...

Again, for those unfamiliar with the CSeries:

http://www.worldairroutes.com/airbalticcs300.html

With up to 160 seats in a single-class layout, this ain’t a stretched CRJ...

With Boeing partnering with Embraer, the E-2 series are going to be flying too, in niches where the aircraft is most economical. Better at Spirit than a regional, and no, all regionals are not bound by scope restrictions (XO, for one).

As long as we fly them and the pay is where it needs to be GREAT!

Absolutely.

Airbus has airframes sitting around for PW's but don't have the engines that work.
The airframe engine mounts won't work with the the Leap engines so, until they work out the PW problems the airframes will be we sitting around.

I thought the C Series engines were from the same engine family as the 320neo. Are the few C series that have gone out having engine issues?

They are but different sub variant.

My checking account hasn't been cost neutral since the ratification nor has my 401k or sick balance. I am making far more money, with far more retirement, and with far more sick pay.

But does it have a tray table?

http://www.airliners.net/photo/Swiss...bYaFmx7z96XTQKDoesn’t look like it :(

It actually does have a tray table and you can eat off of it. I have seen plenty of pics showing the SWISS pilots using the tray table on their CS100s and 300s. This cockpit would be A LOT more comfortable than any Embraer E2 or Boeing 737 cockpit (sidesticks help) - not that it matters in the slightest to the bean counters.

Why isn’t wall street questioning the “leadership”? Bobby two scoops didn’t know we wanted to continue growing? Why not order airplanes years ago?

Or is this press really planned to get RFP’s on the other jets and then go back to Airbus?

It all seems too planned out, some EVP in Seattle giving a quote to someone about 737’s and some other guy talking about C Series and EMB’s...I think they are trying to play Airbus.

Very possible. Of course, now Airbus and Bombardier are linked through the CSeries program (Airbus acquired 51% of it). Maybe we’ll see a joint offer of both Airbus and CSeries airframes as part of a package deal... You never know.

Well, Yuri does have a large yellow C-Series model on prominent display in his office. What more proof do you need. It's not like he's some troll who get his jollies by playing mind games with the employees beneath him, right?

[QUOTE=Ed Force One;2575388]Well, Yuri does have a large yellow C-Series model on prominent display in his office. What more proof do you need. It's not like he's some troll who get his jollies by playing mind games with the employees beneath him, right?[/QUOTE

Who's Yuri?

"Spirit Airlines to buy regional jets to fill the gap in barely served routes"

https://airlinerwatch.com/spirit-air...served-routes/

Can't tell if there is any truth to the article. The Sales VP isn't actually quoted saying anything about regional jets. Kind of just seems like lazy reporting...

calling the cseries a regionsl jet is a stretch.....

It's a click bait website. They don't know anything

Agreed. Again, the CSeries ain’t an elongated CRJ. The CS300 has more seats than an A319. The combination of smaller CS100s (110-130 seats) and CS300s (140-160 seats in all-economy layout) would offer the best flexibility - same type rating and 95% part commonality between both models. And both are 25-30% more fuel efficient than current A319/320s.

True, however the bean counters will have to figure out if the lower fuel burn rate will actually save the company money with regards to our A319's. Adding a new fleet type is no cheap thing so it would have to be quite a large order of CS's or E-Jets to outweigh those costs. This is why Southwest never got into them and why Jetblue is rumored to be looking at dumping their E-Jets.

Good points. Keep in mind that the bean counters are looking at two things: financing costs and operating costs. The financing costs include purchase price (or leasing rate) per unit. The operating costs include factors like fuel efficiency and sector length, etc. If the operating costs of the CSeries and E2 are 20-30% better than the standard (non-NEO) A319 and A320, then the bean counters need to negotiate a volume deal that will bring the financing costs PER UNIT closer to the price of a conforming used A320 or A319 - both of which are being sought worldwide by airlines like Allegiant, United and numerous Chinese airlines. And we are not even considering factors like passenger ergonomics or long-term value of the airframe (depreciation). In this case, both financing and operating costs need to be considered.

With regard to integrating a new fleet type and the associated costs, obviously there will be costs. That has to be weighed and compared to the benefits associated with improved efficiency (CASM) and the ability to better match capacity to demand. If your CASM is reduced, they should help offset integration costs which can be spread over time.

The article about adding “smaller” jets was interesting. Think about it, if Spirit can offer nonstop flights on thinner routes with no or little direct competition (eg PHX to PBI or PVD to OAK), yields can increase (less direct competition = better pricing ability). With increased fuel efficiency, breakeven load factor goes down. If you are competing with SWA, F9, JB and the legacies (using their cheaper Skywest, Mesa, Republic and Compass E175 feed) on the typical trunk routes, the potential yield is constrained. So, in the search for better yields, revenue and profit growth should come from exploiting new routes with required demand and limited direct competition. Typical trunk routes (ORD-LAX or ORD-LGA) are important, but potential profit with so much seat capacity and competition can be more difficult to achieve.

Your point regarding JetBlue and their experience with the E190 is relevant. The E190 can definitely better match seat supply with demand on routes that would be unprofitable for an A320 (eg JFK-SYR or BOS-RDU). That is partly because JB is competing with so many lower-cost feed/regional operators flying around the NE and Midatlantic for origin-and-destination traffic. But JB sees value in feeding its big JFK and BOS hubs and it doesn’t outsource to regionals - it needs the feed and the A320 isn’t suited for certain routes. Unfortunately, the E190 has had a higher CASM than expected and numerous maintenance issues. Additionally, unlike the new CSeries and E2, the older E190 is range constrained - you won’t see JB flying them west of DFW. Meanwhile, a new CS100 or CS300 can fly both short range shuttle flights or thinner transcon flights (eg PVD-SAN). SWISS operates their CS100s and 300s on both 30-minute shuttle hops and 5-hour flights. Here’s a good look at SWISS’s smaller, 110-120 seat CS100:

https://blog.swiss.com/en/2017/04/pilots-view-of-the-swiss-bombardier-cs-100/

Not surprisingly, JB is also closely reviewing both the CSeries and E2 as potential E190 replacements. Air Canada has also had similar issues with their E190s and it has been trying to dump them for years - AC will replace them with 45+ new CS300s starting in 2019.

Another consequence either intended or not is who will fly these jets? Most regional's now are having great difficulties filling classes. If the pay is right, I could see A LOT of regional guys and gals fed up with being paid pennies on the dollar jumping ship and putting at large dent in the regional's ability to hire and maintain feed for the majors which in all honesty, puts a smile on my face. Lots and lots of retirements coming up. Part of the strategy perhaps? Kicking UAL, DAL etc. right in the nuts?

Expansion is the goal. We need more planes to serve more airports and to increase frequency. I welcome any and all purchases of new airplanes.

The facts are already in guys. 737-800s will be announced concurrent with the earnings call on 4/26. Initial order of 50 with 100 options.

When you are wrong come Thursday you have to delete your account.

Any mention of new airplanes in the investor call?

negativo. 12345

Added 7 NEO's. Total in 2021 went from 161 to 177.

I missed all but the end of the Q and A. Did they say they thought they could meet the additional growth they thought they needed in coming years with the additional NEO’s and retained 319’s?

Yes.


123456

Darn. Thanks.

I wonder if they may keep their eyes open for single production slots here and there or deferred/declined bus orders to pick up planes where they can and either grow the fleet or put a 319 out to pasture.

Are the 319's not making money?

Don’t know, but it seems like Spirit has been scheming to dump them for a long time. They are getting long in the tooth so I’m sure Mx costs are up a bit, but who knows.

they are falling apart