Low-cost carriers have come to represent not so much a wide price variation, but a different way of thinking at the corporate level and goals for fliers that are focused on retention and rewards through more creative means.
The economy may be slowing, but low-cost carriers are still growing, according to several airline executives who spoke at an aviation conference in Dallas on Monday.
Spirit Airlines, which has expanded service at Dallas/Fort Worth Airport to 26 destinations within two years of launching in North Texas, expects to grow by 15 to 20 percent, said chief executive Ben Baldanza.
Baldanza said his airline’s low-cost model, where customer pay for seating assignments and baggage, makes Spirit the “McDonald’s” of his industry and that in a sluggish economy he expects Spirit to continue to do well.
And it’s not just low-frills airlines experiencing growth.
Virgin America, with its premium cabin offerings, has grown about 30 percent as it continues to add new aircraft.
“Growing is very difficult in this environment right now,” said Virgin’s chief executive, David Cush, adding that its growth will slow as aircraft deliveries come to an end. However, he said that the carrier’s corporate travel growth has doubled in the past twelve months.
JetBlue’s chief executive, Dave Barger, said his carrier expects to grow between six and eight percent as it adds 10 aircraft this year. He described JetBlue as a “tweener” which doesn’t have the network breadth of carriers like United Continental and Delta but offers more services than other discount airlines.
People will pay a premium to fly on JetBlue,” Barger said.
Consolidation was also discussed at the Boyd Group International Aviation Summit as several executives said mergers have made the airline industry more stable.
Gary Kelly, chief executive at Southwest Airlines, said his airline is on track to connect its passenger reservation system with AirTran Airways, which it purchased in 2011. Kelly said he expects customers will be able to book AirTran flights on Southwest’s website in the first quarter of 2013.
The one person not talking about consolidation was US Airways President Scott Kirby.
During his speech, Kirby acknowledged that he can’t violate the non-disclosure agreement the carrier has signed with AMR Corp. so it can begin merger talks with American’s parent.
But he reiterated the long-standing view held by US Airways management that consolidation has been good for the industry.
(c)2012 the Fort Worth Star-Telegram. Distributed by MCT Information Services.
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