Spirit Airlines remains keen on growth as airline mergers and rising airfares continue to create opportunities for the Miramar-based low-cost carrier to expand its network, executives said Monday during the airline's 2013 Analyst Conference.
"The same consolidation that has stabilized the industry has also created more growth opportunities for Spirit," CEO Ben Baldanza said. "We're bullish about the growth of the company and where we can go."
This month marks two years since Spirit launched its initial public offering of 15.6 million shares at $12 each, and over that period stock prices have "done well," Baldanza noted.
In trading Monday, shares rose 28 cents, or nearly 1 percent, to $28.78.
Spirit expects to grow at a rate of 15 percent to 20 percent over the next several years, and much of that growth through 2014 will be concentrated in the United States, mostly in markets it already serves, such as Dallas-Fort Worth, Texas, Baldanza said.
Dallas-Fort Worth is now Spirit's second-largest destination, behind Fort Lauderdale-Hollywood International Airport, according to airport officials. Spirit is the Fort Lauderdale airport's No. 2 carrier, with 16.2 percent of passenger traffic this year through March, behind JetBlue Airways' 17.5 percent. Last year, while Spirit was the airport's top carrier overall, its capacity there fell 6.7 percent.
Spirit has lost ground to JetBlue, which is expanding aggressively at the Fort Lauderdale airport and held the No. 1 spot for passenger traffic from December through March.
In 2012, much of Spirit's growth was in the western U.S., Baldanza said.
That continued a trend started in 2011, when Spirit began to seize opportunities to grow in domestic markets outside its traditional east coast U.S. and Florida route network, he said.
"Between 2005 and 2010, most of the growth was in that corridor, a lot of expansion in the Caribbean, into northern, South and Central America," Baldanza said. "The lower fruit on the tree right now is in the U.S."
In June, Spirit plans to start new nonstop service between Dallas-Fort Worth and Latrobe, Pa., and to Los Cabos, Mexico. It also recently announced new nonstop routes from Houston's George Bush Intercontinental Airport to Denver and Detroit.
In April, the carrier added several more new routes from airports in Baltimore-Washington, Dallas-Fort Worth, Philadelphia and Denver to cities in the Midwest and South and on the West Coast.
Spirit officials say these markets represent opportunities for the airline to stimulate traffic and offer lower fares.
"We look at markets that have at least 200 people a day flying [each way], and they have really high fares and presumably, in most cases, really high costs for the incumbent carriers there," Spirit's Chief Marketing Officer Barry Biffle said, "And when we look at that, we find today that there's over 400 markets that we believe we can enter, stimulate the market, reach our target margins and grow."
Biffle said that once a new route is launched, the airline will aggressively monitor the service to make sure it's profitable and meeting expectations. If it isn't profitable, those resources would likely be deployed in another market where the carrier can make money.
While Spirit's ultra-low-cost model seems to resonate with fliers seeking the cheapest airfare, customers weren't happy about other aspects of their travel experience.
Cramped seats and advance seating and bag fees were some of the things some customers who were recently surveyed said they didn't like about Spirit, Baldanza said.
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Copyright 2013 - Sun Sentinel
