Common decency suggests you don’t kick a man while he’s down. That sort of policy doesn’t necessarily apply in business, however, and it definitely doesn’t apply for Spirit Airlines. Following on their $11 (plus a myriad of fees that no one can ever reasonably figure out) sale to celebrates American Airlines‘ filing for Chapter 11 bankruptcy protection earlier in the week, the Spirit announced a few new routes today focused on the troubled carrier’s fortress hub at Dallas Ft Worth.
Spirit announced this morning that they are launching four new destinations with once daily round-trip service this spring. The new destinations are LaGuardia airport in New York City, Atlanta, Boston and Orlando. The first three are big business markets where American will almost see an erosion of yields thanks to this move. That’s not going to help in their efforts to keep the revenue up. At least it is only once daily service compared to the AA frequencies on offer (BOS – 8, ATL – 12, LGA – 15, MCO – 11) so there is still going to be plenty of opportunities for AA to keep most of their business.
In other bAAnkruptcy-related news, AA has filed the paperwork to return 24 aircraft to lessors, starting the process of shedding some of their costs. Most of the planes are already grounded so it won’t affect capacity. Yet. They’ve also canceled two pilot recall classes, shifting those pilots back to furlough status.
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“The first three are big business markets where American will almost see an erosion of yields thanks to this move.”
Is Spirit really competitive when it comes to business travel, though?
Really competitive, no. But them publishing fares into a market messes things up for other carriers in many ways. Either the other carrier has to respond and publish similar fares or ignore that chunk of the market and, depending on travel policies, lose customers. I’ve yet to see a market where any new entrant shows up and there isn’t some matching of fares. I doubt this will be the first.
If you are AA flying 15 aircraft per day to LGA and along comes scrappy Spirit with one 29″ seat pitch flight per day, how many of your seats are you going to discount to their levels?
Thus far it appears that the AA response has actually been to raise prices, both for one-way and return trips. We’ll see how that works out in the longer run.