TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 3:10 pm

On the quarterly call, the new CEO said that Spirit wants to expand in large, constrained airports. An analyst used the word "slot constrained airports" and the CEO did not correct it. This is somewhat of a change from the previous Spirit leadership groups that at one point sold their DCA slot portfolio. He specifically listed Los Angeles and Chicago, but appears implied they want slots.

It would be interesting to know under what scenario that could happen that they are thinking of? They could buy or lease slots/gates, but that would be a big change from the old Spirit. It's more likely they will attempt to wrangle free slots and gates. Is there a merger or deal out there that they are aware of that would result in the DOT/DOJ distributing more slots/gates at major airports? Or are they going to ramp up their efforts with DOT/DOJ to try to knock loose assets at the largest airports?
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 3:14 pm

I'm sure it's the latter. We may see a concerted push by some airlines to revise competition plan regulations, but I guess that'd have to wait until the next FAA reauthorization.

And to telegraph to any airports negotiating new agreements to reallocate gates or keep a meaningful amount in reserve as common use.
 
User avatar
enilria
Posts: 9615
Joined: Fri Feb 22, 2008 7:15 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 3:20 pm

jetero wrote:
I'm sure it's the latter. We may see a concerted push by some airlines to revise competition plan regulations, but I guess that'd have to wait until the next FAA reauthorization.

And to telegraph to any airports negotiating new agreements to reallocate gates or keep a meaningful amount in reserve as common use.

JetBlue definitely just ramped up their attacks of JVs with ATI which I think is a pro-consumer effort (although they obviously benefit). It may be that Spirit will join with JetBlue or others in demanding fixes for the problems that have been created by allowing all these mergers.

I agree the Spirit CEO would not bring up it being a priority to expand constrained markets unless they have a plan to get more assets. It will be interesting to see how.
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 3:25 pm

The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?
 
MIflyer12
Posts: 5819
Joined: Mon Feb 18, 2013 11:58 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 4:26 pm

TerminalD wrote:
On the quarterly call, the new CEO said that Spirit wants to expand in large, constrained airports.


Doesn't everybody?

Do you interpret that as Spirit being willing to buy slots and build new facilities? If you don't, Spirit is just looking for charity at somebody else's expense.
 
maps4ltd
Posts: 376
Joined: Tue May 08, 2018 4:48 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 4:34 pm

How much clout does Spirit have in slot wars at constrained airports?

I think it should focus on second-tier cities, like their recent adds of Columbus and Asheville. I would love to see some Mid-western expansion (a la IND, STL, OKC, MKE). They have already got the big routes (LAX-DEN, ORD-LGA, etc.) pretty well covered. If they could build out their network in the Heartland that would be excellent. Go into smaller markets from ORD and DFW.
Delta Gold Medallion and Southwest A-List
 
User avatar
Midwestindy
Posts: 4146
Joined: Sun Mar 12, 2017 3:56 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 4:43 pm

maps4ltd wrote:
How much clout does Spirit have in slot wars at constrained airports?

I think it should focus on second-tier cities, like their recent adds of Columbus and Asheville. I would love to see some Mid-western expansion (a la IND, STL, OKC, MKE). They have already got the big routes (LAX-DEN, ORD-LGA, etc.) pretty well covered. If they could build out their network in the Heartland that would be excellent. Go into smaller markets from ORD and DFW.


NK is already starting IND on March 14th
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
msycajun
Posts: 1061
Joined: Thu Jun 16, 2016 4:13 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:02 pm

I haven't had a chance to hear that part of the call, but it would seem to me that NK would be looking at LGA, DCA, ORD, LAX, CLT, SLC, BNA, and MEX in the near to medium term, all of which are either slot controlled or have limited gate availability. I wouldn't be shocked if they tried to grab some or all of the 4 slots in MEX that WN is giving up.
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:16 pm

Midwestindy wrote:
NK is already starting IND on March 14th

IND is definitely not constrained.
msycajun wrote:
I haven't had a chance to hear that part of the call, but it would seem to me that NK would be looking at LGA, DCA, ORD, LAX, CLT, SLC, BNA, and MEX in the near to medium term, all of which are either slot controlled or have limited gate availability. I wouldn't be shocked if they tried to grab some or all of the 4 slots in MEX that WN is giving up.

MEX is interesting, but I'm not sure they are equipped to sell tickets in Mexico either.
I disagree BNA is that constrained. SY just added a bunch there. CLT is building gates, but that could be the real estate play. SLC is building gates, but I have not heard of anybody having trouble getting space there. Agreed on the others.
maps4ltd wrote:
How much clout does Spirit have in slot wars at constrained airports?

On the surface none, but I think what we might be seeing is an attempt to change the way DOT looks at who is disadvantaged. I think the DOT has bent over backward for a long time to take care of WN because they represented competition in their eyes because of the highly touted "WN effect". IMHO there no longer is a "WN effect". I think NK and B6 and maybe F9 could make the case that the DOT needs to now move away from making WN their favored son and switch to their group. To be fair, I don't think DOT has had any issues before them in quite a while that even gave them the opportunity to favor WN. The MEX slot allocation may have been the most recent, although WN is definitely a new entrant when it comes to the breadth of their intl network. Regardless, I think B6/NK/F9 would be smart to start pleading poverty to DOT and probably DOJ. I'm just not sure what DOT/DOJ have to give them at this point. They would really need a merger to juggle things...unless there is another transaction out there we don't know about. WN-B6? B6-AS? Or an asset sale of AA slots at JFK to DL, or who knows what else.
MIflyer12 wrote:
Do you interpret that as Spirit being willing to buy slots and build new facilities? If you don't, Spirit is just looking for charity at somebody else's expense.

LCCs traditionally have been gifted assets like slots and gates (although they still pay the rent, of course). They have not bought such things. I wouldn't expect that to change.
 
santi319
Posts: 828
Joined: Thu Dec 29, 2005 3:24 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:17 pm

msycajun wrote:
I haven't had a chance to hear that part of the call, but it would seem to me that NK would be looking at LGA, DCA, ORD, LAX, CLT, SLC, BNA, and MEX in the near to medium term, all of which are either slot controlled or have limited gate availability. I wouldn't be shocked if they tried to grab some or all of the 4 slots in MEX that WN is giving up.

I think the slots go up for grabs this month? NK served profitably TLC until the airport probably raised their fees and made no sense. MEX is just a matter of time.
Last edited by santi319 on Wed Feb 06, 2019 5:24 pm, edited 1 time in total.
 
User avatar
enilria
Posts: 9615
Joined: Fri Feb 22, 2008 7:15 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:18 pm

TerminalD wrote:
The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?

With the leadership change, I think we are definitely going to see changes with their strategy. They have been very successful, so it is going to be hard to top what they were already doing. BUT I eagerly await whatever it is.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:19 pm

TerminalD wrote:
The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?


I think you may be reading way too much into it, but who knows. Sounds like a throwaway comment to me, what airline wouldn't say that they would expand rapidly in a large market if it makes financial sense. It's no secret they want more space at the busiest airports.
 
User avatar
Midwestindy
Posts: 4146
Joined: Sun Mar 12, 2017 3:56 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:25 pm

TerminalD wrote:
Midwestindy wrote:
NK is already starting IND on March 14th

IND is definitely not constrained.


I agree, read what I was responding to

Midwestindy wrote:
maps4ltd wrote:
I would love to see some Mid-western expansion (a la IND, STL, OKC, MKE). They have already got the big routes (LAX-DEN, ORD-LGA, etc.) pretty well covered. If they could build out their network in the Heartland that would be excellent. Go into smaller markets from ORD and DFW.


NK is already starting IND on March 14th
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
User avatar
flymco753
Posts: 3271
Joined: Fri Jun 10, 2016 2:09 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:39 pm

Building MCO since at this time, space is constrained and there's going to be a lot of opportunity for real estate once terminal C is done. They'll probably stop expanding BWI & DTW and begin really expanding at the bigger airports like ORD, LGA, & LAX.
...the carriage of liquids, gels, and aerosols are prohibited through the screening checkpoint except for travel size toiletries of 3 ounces or less...
 
msycajun
Posts: 1061
Joined: Thu Jun 16, 2016 4:13 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 5:40 pm

TerminalD wrote:
msycajun wrote:
I haven't had a chance to hear that part of the call, but it would seem to me that NK would be looking at LGA, DCA, ORD, LAX, CLT, SLC, BNA, and MEX in the near to medium term, all of which are either slot controlled or have limited gate availability. I wouldn't be shocked if they tried to grab some or all of the 4 slots in MEX that WN is giving up.

MEX is interesting, but I'm not sure they are equipped to sell tickets in Mexico either.
I disagree BNA is that constrained. SY just added a bunch there. CLT is building gates, but that could be the real estate play. SLC is building gates, but I have not heard of anybody having trouble getting space there. Agreed on the others.


I don't know exactly what the situation is at BNA, CLT, and SLC, but I have heard that BNA is pretty much full and getting gates is not easy at CLT and SLC, but there will be more coming available as you mentioned. SY adding a couple of 2 weekly routes is very different from NK, who would be looking to start new domestic stations with 7-10 flights as we see with AUS and RDU. I think that helps them guard against anticompetitive responses from other carriers - it's one thing to price match and throw a few extra planes on one route, but very difficult when several routes are added.

I think MEX would do better than WN for sure. NK has a lot more experience and familiarity with the VFR market.
 
User avatar
LAX772LR
Posts: 12486
Joined: Sun Nov 09, 2014 11:06 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 6:36 pm

TerminalD wrote:
On the quarterly call, the new CEO said that Spirit wants to expand in large, constrained airports. An analyst used the word "slot constrained airports" and the CEO did not correct it. This is somewhat of a change from the previous Spirit leadership groups that at one point sold their DCA slot portfolio. He specifically listed Los Angeles and Chicago, but appears implied they want slots.

"slots" are not the problem at either one of those airports, nor nearly any other in the USA...... gates are.

People seem to constantly mistake/conflate/confuse the two.
Yes it's a similar problem, but they're different issues addressed by different solutions requiring different regulation, financing, and timing.
I myself, suspect a more prosaic motive... ~Thranduil
 
TWA1985
Posts: 646
Joined: Sun Nov 12, 2006 3:24 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 6:46 pm

I wonder where else they’ll potentially fly from ORD? They’ve had a significant operation there for years already with 24 non-stop destinations being served.
Be Young. Be Wild. Be Free.
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 7:46 pm

jetero wrote:
TerminalD wrote:
The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?


I think you may be reading way too much into it, but who knows. Sounds like a throwaway comment to me, what airline wouldn't say that they would expand rapidly in a large market if it makes financial sense. It's no secret they want more space at the busiest airports.

Well, it wasn't a throwaway as it was in the CEO's sort of goals for the new year section, but it also came up twice more in the Q+A with questions about what it really meant which is where the comments about grabbing "real estate" came up.

So, I think it's interesting in terms of the tea leaves. Pre-Fornaro the airline was expanding in other airline's hubs with big build-ups in places like DFW and IAH and DEN and ORD and LAX and more. Under Fornaro, the additions became more like what AirTran did with a focus on medium markets sprouting a lot of routes to Florida. So, if this is what it appears to be, I would say it will roll back more toward the prior strategy of large hubs.

Here's another thing I think people miss. Frontier's strategy which is the direction NK has been heading the last couple of years gives the company no long term market value. This is why F9 hasn't IPO'd. Gates and slots at constrained airports are an airline's real assets. Airplanes are basically worthless because the debt or lease usually washes with the asset value equaling nothing. The "brand" is value-less to an acquirer because they will eliminate it. The customer base of an ULCC (frequent flier program, mailing list, etc.) is worthless because they are price-sensitive and not loyal. They will leave in a second for the lower price. So, all you really have are your gates and slots. Real Estate. So, I would not be surprised if *THAT* is a way they have concluded to build value with the real value of that stuff being at constrained large hubs and slot airports.
 
User avatar
enilria
Posts: 9615
Joined: Fri Feb 22, 2008 7:15 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 7:54 pm

TWA1985 wrote:
I wonder where else they’ll potentially fly from ORD? They’ve had a significant operation there for years already with 24 non-stop destinations being served.

F9 has been trying stuff like HSV and BNA to ORD, so I guess the water is warm enough for a lot of stuff that would have been considered off the wall not long ago. If something like MGM-ORD works 2/week for a ULCC then the doors really open, but what a mess running a bunch of stations with a single flight per day.
TerminalD wrote:
So, I think it's interesting in terms of the tea leaves. Pre-Fornaro the airline was expanding in other airline's hubs with big build-ups in places like DFW and IAH and DEN and ORD and LAX and more. Under Fornaro, the additions became more like what AirTran did with a focus on medium markets sprouting a lot of routes to Florida. So, if this is what it appears to be, I would say it will roll back more toward the prior strategy of large hubs.

That's certainly possible, but I'd be a little surprised if they roll back to adding things like DEN-LAX. I think this could me more ORD-RDU type stuff.
TerminalD wrote:
So, all you really have are your gates and slots. Real Estate. So, I would not be surprised if *THAT* is a way they have concluded to build value with the real value of that stuff being at constrained large hubs and slot airports.

I think you might be on to something there. I also wonder if a deeper part of this might be denying F9 the same gate assets as way of securing NK's position as top dog in the ULCC space. And there's also Moxie to think about and their coming attempts to grab real estate.
 
drdisque
Posts: 1113
Joined: Mon Mar 26, 2007 9:57 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 7:57 pm

NK realizes that in the current environment with enough space and equipment, they can profitably serve any decent sized market in the US from ORD and LAX, so naturally, they'd want any space they can get.
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:04 pm

drdisque wrote:
NK realizes that in the current environment with enough space and equipment, they can profitably serve any decent sized market in the US from ORD and LAX, so naturally, they'd want any space they can get.

Of course, the problem is that you have to use it and they aren't growing as fast as they used to.
enilria wrote:
TerminalD wrote:
So, I think it's interesting in terms of the tea leaves. Pre-Fornaro the airline was expanding in other airline's hubs with big build-ups in places like DFW and IAH and DEN and ORD and LAX and more. Under Fornaro, the additions became more like what AirTran did with a focus on medium markets sprouting a lot of routes to Florida. So, if this is what it appears to be, I would say it will roll back more toward the prior strategy of large hubs.

That's certainly possible, but I'd be a little surprised if they roll back to adding things like DEN-LAX. I think this could me more ORD-RDU type stuff.

So, to be fair, it's been a tug-of-war on who is stealing whose strategy between NK and F9. When Indigo bought NK they made them a real ULCC and they went after big city to big city markets. When Indigo swapped to F9 they copy-catted that completely. Eventually F9 started doing a lot less big city to big city and a lot more small city to big city stuff like that HSV-ORD. IMHO, NK then borrowed that strategy under Fornaro with both NK and F9 basically now following the same exact formula of entering a new small or medium city and adding flights to a number of destinations. The only difference is F9 has been doing more Florida destinations whereas F9 has been doing a mix of everything from leisure to oddball business-ish markets like BNA-ORD.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:05 pm

TerminalD wrote:
jetero wrote:
TerminalD wrote:
The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?


I think you may be reading way too much into it, but who knows. Sounds like a throwaway comment to me, what airline wouldn't say that they would expand rapidly in a large market if it makes financial sense. It's no secret they want more space at the busiest airports.

Well, it wasn't a throwaway as it was in the CEO's sort of goals for the new year section, but it also came up twice more in the Q+A with questions about what it really meant which is where the comments about grabbing "real estate" came up.

So, I think it's interesting in terms of the tea leaves. Pre-Fornaro the airline was expanding in other airline's hubs with big build-ups in places like DFW and IAH and DEN and ORD and LAX and more. Under Fornaro, the additions became more like what AirTran did with a focus on medium markets sprouting a lot of routes to Florida. So, if this is what it appears to be, I would say it will roll back more toward the prior strategy of large hubs.

Here's another thing I think people miss. Frontier's strategy which is the direction NK has been heading the last couple of years gives the company no long term market value. This is why F9 hasn't IPO'd. Gates and slots at constrained airports are an airline's real assets. Airplanes are basically worthless because the debt or lease usually washes with the asset value equaling nothing. The "brand" is value-less to an acquirer because they will eliminate it. The customer base of an ULCC (frequent flier program, mailing list, etc.) is worthless because they are price-sensitive and not loyal. They will leave in a second for the lower price. So, all you really have are your gates and slots. Real Estate. So, I would not be surprised if *THAT* is a way they have concluded to build value with the real value of that stuff being at constrained large hubs and slot airports.


Alrighty then, TerminalD . . . so what exactly are the "tea leaves" saying that they're going to do? Acquire gates at ATL, LGA, LAX, and ORD? From whom exactly?

The simple fact of the matter is that in the past couple of years they have requested more gates at these (and other) airports and have been denied because there aren't any.

So I think if anything it signals a concerted push on the regulatory side.
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:14 pm

jetero wrote:

Alrighty then, TerminalD . . . so what exactly are the "tea leaves" saying that they're going to do? Acquire gates at LGA, LAX, and ORD? From whom exactly?

I think they are going to do more ORD-BNA/RDU/BDL type of stuff, if I had to guess. I don't think they would buy gates/slots, so they have 4 options:
1) encourage new gates to be built and grab them
2) go complain to the DOT/DOJ about hub concentration.
3) wait for a new merger to get offered something by DOJ/DOT
4) trade one thing for another. Somebody else posted in another thread that it is likely that the WN/B6/NK log jam in FLL will become two instead of three because that's just how the industry goes. They also have LGA slots. Not sure if they are transferable in trade for something else.
 
User avatar
enilria
Posts: 9615
Joined: Fri Feb 22, 2008 7:15 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:17 pm

TerminalD wrote:
jetero wrote:

Alrighty then, TerminalD . . . so what exactly are the "tea leaves" saying that they're going to do? Acquire gates at LGA, LAX, and ORD? From whom exactly?

I think they are going to do more ORD-BNA/RDU/BDL type of stuff, if I had to guess. I don't think they would buy gates/slots, so they have 4 options:
1) encourage new gates to be built and grab them
2) go complain to the DOT/DOJ about hub concentration.
3) wait for a new merger to get offered something by DOJ/DOT
4) trade one thing for another. Somebody else posted in another thread that it is likely that the WN/B6/NK log jam in FLL will become two instead of three because that's just how the industry goes. They also have LGA slots. Not sure if they are transferable in trade for something else.

I guess the 5th option would be to just wait for a nut to fall off the tree and grab it quickly. I just saw BA and AA will be moving in together in JFK. Those types of deals often cause something to be freed up. Arguably MEX slots are that type of opportunity.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:20 pm

TerminalD wrote:
jetero wrote:

Alrighty then, TerminalD . . . so what exactly are the "tea leaves" saying that they're going to do? Acquire gates at LGA, LAX, and ORD? From whom exactly?

I think they are going to do more ORD-BNA/RDU/BDL type of stuff, if I had to guess. I don't think they would buy gates/slots, so they have 4 options:
1) encourage new gates to be built and grab them
2) go complain to the DOT/DOJ about hub concentration.
3) wait for a new merger to get offered something by DOJ/DOT
4) trade one thing for another. Somebody else posted in another thread that it is likely that the WN/B6/NK log jam in FLL will become two instead of three because that's just how the industry goes. They also have LGA slots. Not sure if they are transferable in trade for something else.


Well (1) was done months ago in ORD and new gates always have long-term lead times. They've secured more gates in ORD in the terminal redevelopment, but they're at least 5 years out (I forget the exact timeline).

(2) Exactly what I've been saying.

(3) Not much they can do on this one now, is there? Kind of like UA saying, "We're waiting on AA to dehub ORD, and, if they do, we'll pick up the slack."

(4) NK has its own product in FLL so I'm not sure it'd be NK. Re LGA, doesn't that counter to what you're saying the "tea leaves" are saying?
 
User avatar
FA9295
Posts: 1770
Joined: Thu Feb 25, 2016 7:44 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 8:48 pm

TerminalD wrote:
The CCO just said (paraphrasing) "we will expand rapidly in a market if we get the opportunity through a real estate change to grab space...if it makes financial sense".

So, they are clearly hinting at something. I wonder what market they are hinting at? LAX? SFO? ORD?

Certainly not SFO. If anything, an expansion of OAK may be on the horizon...

If they're able to get some gates at SFO to operate from, then it might happen, but I just don't see how that would make sense for them...
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 9:03 pm

jetero wrote:
TerminalD wrote:
jetero wrote:

Alrighty then, TerminalD . . . so what exactly are the "tea leaves" saying that they're going to do? Acquire gates at LGA, LAX, and ORD? From whom exactly?

I think they are going to do more ORD-BNA/RDU/BDL type of stuff, if I had to guess. I don't think they would buy gates/slots, so they have 4 options:
1) encourage new gates to be built and grab them
2) go complain to the DOT/DOJ about hub concentration.
3) wait for a new merger to get offered something by DOJ/DOT
4) trade one thing for another. Somebody else posted in another thread that it is likely that the WN/B6/NK log jam in FLL will become two instead of three because that's just how the industry goes. They also have LGA slots. Not sure if they are transferable in trade for something else.


Well (1) was done months ago in ORD and new gates always have long-term lead times. They've secured more gates in ORD in the terminal redevelopment, but they're at least 5 years out (I forget the exact timeline).

(2) Exactly what I've been saying.

(3) Not much they can do on this one now, is there? Kind of like UA saying, "We're waiting on AA to dehub ORD, and, if they do, we'll pick up the slack."

(4) NK has its own product in FLL so I'm not sure it'd be NK. Re LGA, doesn't that counter to what you're saying the "tea leaves" are saying?

So, #2. Completely Agree.
#4.People wrongly assume these trades are 1:1. One LGA roundtrip might translate into a whole gate in FLL worth 6-8 RTs. That's significant growth. I only say trade because that's how the deals usually happen. Plus NK isn't going to write a big check.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 9:07 pm

TerminalD wrote:
#4.People wrongly assume these trades are 1:1. One LGA roundtrip might translate into a whole gate in FLL worth 6-8 RTs. That's significant growth. I only say trade because that's how the deals usually happen. Plus NK isn't going to write a big check.


Please translate what you're hypothesizing here. That NK gives up a single LGA slot for a gate in FLL?

What does that have to do with the "tea leaves" from the earnings call, which specifically mentioned ORD and LAX?
 
N292UX
Posts: 429
Joined: Sun Jan 01, 2017 7:08 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 9:18 pm

Does this include slot-restricted airports? Or just ones with high amounts of flights. Excluding JFK & DCA due to slots, I guess they would look at places like ORD, LAX, DFW, SFO, SEA, EWR, BOS & SAN among others. Though it's worth noting they've already grown rapidly at ORD, and have decent sized operations at LAX & EWR. And I would bet NK wouldn't want to enter SFO since they already have a solid operation out of OAK. Same goes with MIA, even more so considering that FLL is one of their largest, if not, their largest focus city. So I have doubts about SFO. MIA definitely won't happen. Period.
 
UWPAviation
Posts: 110
Joined: Mon Dec 19, 2016 7:36 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 10:03 pm

maps4ltd wrote:
How much clout does Spirit have in slot wars at constrained airports?

I think it should focus on second-tier cities, like their recent adds of Columbus and Asheville. I would love to see some Mid-western expansion (a la IND, STL, OKC, MKE). They have already got the big routes (LAX-DEN, ORD-LGA, etc.) pretty well covered. If they could build out their network in the Heartland that would be excellent. Go into smaller markets from ORD and DFW.


The problem with midwest expansion is that there is already so many established airlines to compete with like WN and F9. For MKE, WN is the largest carrier and already flies to most of the destinations I would presume Spirit to fly to. Doesn't help that F9 flies to most of the "holiday" destinations as well as some business. Now you throw in Allegiant who flies to all the cities you mention to virtually the same cities. And I haven't touched the recent expansion of Sun Country.

I just think there is too much competition here. Thats why I get what the expansion in an airport like ORD. They are the premier low-cost carrier at the airport so why not keep it up.
 
santi319
Posts: 828
Joined: Thu Dec 29, 2005 3:24 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 10:10 pm

[quote="UWPAviation”]

I just think there is too much competition here. Thats why I get what the expansion in an airport like ORD. They are the premier low-cost carrier at the airport so why not keep it up.[/quote]



I think something big is comming at NK. The new planes don’t have the “stylized” Spirit logo anymore just plain black and the “bare fare” signs were removed from the engines. The are now extremely focused on customer service and on most of their social media posts the responses are positive.

They don’t refer to themselves as Ultra Low cost anymore either, and they are in the top 3 on time airlines in the US. Could they be morphing more into a business friendly airline, and as they see this trend, they are trying to grab space in the busiest airports?
 
User avatar
Frontier14
Posts: 613
Joined: Sat Dec 25, 2010 4:14 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 10:17 pm

santi319 wrote:
[quote="UWPAviation”]

I just think there is too much competition here. Thats why I get what the expansion in an airport like ORD. They are the premier low-cost carrier at the airport so why not keep it up.[/quote]



I think something big is comming at NK. The new planes don’t have the “stylized” Spirit logo anymore just plain black and the “bare fare” signs were removed from the engines. The are now extremely focused on customer service and on most of their social media posts the responses are positive.

They don’t refer to themselves as Ultra Low cost anymore either, and they are in the top 3 on time airlines in the US. Could they be morphing more into a business friendly airline, and as they see this trend, they are trying to grab space in the busiest airports?[/quote]


I think you may be on to something here. Since Christie has taken over the CEO status for NK they have made some serious improvements in their product, both hard and soft. Christie was previously the CFO for Frontier a few years ago and had a keen eye for costs etc....They are playing with the big boys when they can efficiently run 3X daily DET-LAS on a consistent basis.

Frontier 14
 
User avatar
flymco753
Posts: 3271
Joined: Fri Jun 10, 2016 2:09 am

Re: Spirit Wants to Expand in Large Constrained Airports

Wed Feb 06, 2019 10:29 pm

Frontier14 wrote:
santi319 wrote:
[quote="UWPAviation”]

I just think there is too much competition here. Thats why I get what the expansion in an airport like ORD. They are the premier low-cost carrier at the airport so why not keep it up.[/quote]



I think something big is comming at NK. The new planes don’t have the “stylized” Spirit logo anymore just plain black and the “bare fare” signs were removed from the engines. The are now extremely focused on customer service and on most of their social media posts the responses are positive.

They don’t refer to themselves as Ultra Low cost anymore either, and they are in the top 3 on time airlines in the US. Could they be morphing more into a business friendly airline, and as they see this trend, they are trying to grab space in the busiest airports?[/quote][/quote]

I think you may be on to something here. Since Christie has taken over the CEO status for NK they have made some serious improvements in their product, both hard and soft. Christie was previously the CFO for Frontier a few years ago and had a keen eye for costs etc....They are playing with the big boys when they can efficiently run 3X daily DET-LAS on a consistent basis.

Frontier 14[/quote]
They seem to be doing well in DTW. They are running 5 peak flights to MCO this winter, only 2 less than DL. They wouldn't do it.if they didnt think they could successfully compete against DL.
...the carriage of liquids, gels, and aerosols are prohibited through the screening checkpoint except for travel size toiletries of 3 ounces or less...
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Thu Feb 07, 2019 2:14 pm

jetero wrote:
TerminalD wrote:
#4.People wrongly assume these trades are 1:1. One LGA roundtrip might translate into a whole gate in FLL worth 6-8 RTs. That's significant growth. I only say trade because that's how the deals usually happen. Plus NK isn't going to write a big check.


Please translate what you're hypothesizing here. That NK gives up a single LGA slot for a gate in FLL?

What does that have to do with the "tea leaves" from the earnings call, which specifically mentioned ORD and LAX?

They were mentioned as examples of airports that are constrained that they have expanded in. They did not say those are the airports that this new effort was focused on.

Again, I fully agree that whining about their lack of gates/slots may be their primary weapon here, but if there is a transaction solution I can imagine trading LGA slots for FLL gates. I say a trade because I don't see anybody else selling stuff to NK for cash and I don't see NK paying through the nose for it. One takeoff/landing at LGA may well be worth a whole FLL gate. That would allow them to expand at a constrained airport and overall it is quite a bit of growth.

There is also some chance they could expand at EWR (moving things from LGA or just pure expansion) which we haven't talked about, but that actually makes a lot of sense in terms of all of this. I'm not sure what would be the price of EWR expansion? There are no slots, but getting gates is very difficult and I have been told that FAA has to approve any schedule changes that increase peak hour flights which is a de facto slot program.
 
jetero
Posts: 4457
Joined: Sat Oct 11, 2014 3:45 am

Re: Spirit Wants to Expand in Large Constrained Airports

Thu Feb 07, 2019 2:21 pm

TerminalD wrote:
jetero wrote:
TerminalD wrote:
#4.People wrongly assume these trades are 1:1. One LGA roundtrip might translate into a whole gate in FLL worth 6-8 RTs. That's significant growth. I only say trade because that's how the deals usually happen. Plus NK isn't going to write a big check.


Please translate what you're hypothesizing here. That NK gives up a single LGA slot for a gate in FLL?

What does that have to do with the "tea leaves" from the earnings call, which specifically mentioned ORD and LAX?

They were mentioned as examples of airports that are constrained that they have expanded in. They did not say those are the airports that this new effort was focused on.

Again, I fully agree that whining about their lack of gates/slots may be their primary weapon here, but if there is a transaction solution I can imagine trading LGA slots for FLL gates. I say a trade because I don't see anybody else selling stuff to NK for cash and I don't see NK paying through the nose for it. One takeoff/landing at LGA may well be worth a whole FLL gate. That would allow them to expand at a constrained airport and overall it is quite a bit of growth.

There is also some chance they could expand at EWR (moving things from LGA or just pure expansion) which we haven't talked about, but that actually makes a lot of sense in terms of all of this. I'm not sure what would be the price of EWR expansion? There are no slots, but getting gates is very difficult and I have been told that FAA has to approve any schedule changes that increase peak hour flights which is a de facto slot program.


It's Level 2 slot coordination at EWR, ORD, and SFO as described here:

https://www.faa.gov/about/office_org/he ... -airports/
 
ctrabs0114
Posts: 926
Joined: Mon Oct 09, 2017 8:09 am

Re: Spirit Wants to Expand in Large Constrained Airports

Fri Feb 08, 2019 1:18 am

Frontier14 wrote:
I think you may be on to something here. Since Christie has taken over the CEO status for NK they have made some serious improvements in their product, both hard and soft. Christie was previously the CFO for Frontier a few years ago and had a keen eye for costs etc....They are playing with the big boys when they can efficiently run 3X daily DET-LAS on a consistent basis.


I can say that the amount of online complaining about NK (not referring to anything on A.net, but rather YouTube, social media, etc.) has significantly decreased in the last couple of years. Although I wish they had better seating options (ie. seats that recline), but I'm giving them a shot when I fly back from LAS to DFW on a Sunday morning red eye.

I would be shocked if they were making legitimate strides in capturing business-related traffic as was suggested elsewhere in this topic, but I give NK a lot of credit for at least making a good faith effort to improve their image.
2019: DAL, MCI, PHX, LAS, DFW, SAT, ORD, SLC, SEA, DTW, PHL, MIA, LAX; B73G (WN x3), B738 (WN, AA, DL), A20N (NK), MD83 (AA), B788 (AA x2), CS1 (DL), B739 (DL), B712 (DL), B752 (AA), B763 (AA), B77W (AA), B789 (AA)
Next: TBA
 
TerminalD
Topic Author
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

Re: Spirit Wants to Expand in Large Constrained Airports

Fri Feb 08, 2019 1:41 am

Transcript is out. The question is what potential deal was he hinting at?

Ted Christie III -- President and Chief Executive Officer

...In addition, as the opportunities present themselves to grow in large gate constraint metros, we will do so, as this is where many customers who have otherwise been priced out of the market with high fares live and where many leisure customers want to go. We are broadening and diversifying our network, but large cities attract many leisure customers. With our low fares, reliable operations and friendly service, we are the best airline to stimulate and grow the leisure traffic base in these markets.

Hunter Keay -- Wolfe Trahan -- Analyst

Ted, you mentioned, you'd be looking to adding services on the large metros gate constrained specifically that you mentioned. How do you do that, how do you get into some of these gate constrained airports? And when you do, how was your thinking maybe evolved over the last few years about how you market service both to and from those major metros?

Ted Christie III -- President and Chief Executive Officer

Sure, it's a game of patience to be honest, Hunter. We have for the better part of a decade been evolving the network. And I think it's kind of the hidden story around Spirit is the network development over the better part of a decade showing where we've deployed the choices we've made. And in doing so, we've been extremely vocal about and patient with our decisions around where it is we've grown. In fact, over the last two years, the vast majority of our growth have been -- has been in Orlando and Vegas because they're very, very good leisure destinations, they've been extremely accretive to us. But at the same time when available, we've been able to grow in in Los Angeles, and in Chicago, and in Houston, and Dallas, and New York and a lot of large metropolitan areas to because that's where people live and it is also where people want to go.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos