By Winston Shek 09/01/2020 2409 views

Amid the COVID-19 pandemic, some airlines have added routes and new destinations to target leisure demand while others have cut back in other markets.  As a low-cost-carrier, Spirit Airlines wants to target leisure demand.  Today, it has announced a new destination that could serve as a competent alternative to vacationing in Florida: California. Spirit Airlines has announced a new expansion to a new Southern Californian destination, Orange County, otherwise known as John Wayne Airport, according to a press release.


Spirit Airlines has an Airbus-based fleet, with A320's and A321's, credit: Jackson Moskowitz | TheExplorerBlog


Spirit Airlines will launch a 2x daily service to Oakland on November 17th, 2020 using a fleet of A320s.  Also, Spirit Airlines will launch a 1x daily flight to Las Vegas on the same day on an A320.  Below is a timetable of the flights.


Flight #RouteArrivalDepartureAircraft
NK2900OAK-SNA8:00 A.M.9:25 A.M.A320
NK2901SNA-OAK10:25 A.M.11:40 A.M.A320
NK2904OAK-SNA3:59 P.M.5:24 P.M.A320
NK2905SNA-OAK6:14 P.M.7:29 P.M.A320
NK2906LAS-SNA6:30 P.M.7:35 P.M.A320
NK2907SNA-LAS7:00 A.M.8:04 A.M.A320


Spirit Airlines will add its third destination in Southern California, an alternative to its large presence in Los Angeles.  For its destination portfolio from Southern California, Spirit Airlines will add a new destination in Oakland.  Meanwhile, a flight to Las Vegas provides an alternative to its options in Los Angeles.


However, Spirit Airlines will face competition.  At John Wayne Airport(SNA), Spirit Airlines will be competing mainly with JSX, previously known as JetSuiteX, a business regional carrier shuttling passengers between Oakland and Las Vegas to the Los Angeles area.  On its flight to Las Vegas, Spirit Airlines will face additional competition from its main ultra-low-cost competitor, Frontier Airlines, as well as Southwest Airlines.


Also, Spirit Airlines will be facing indirect competition in the Bay Area, as Southwest Airlines flies to the Silicon Valley gateway in the area, otherwise known as San Jose (CA).  The carrier will also face competition from Alaska Airlines via San Francisco.


Executives at the airport tout it as a move to give consumers more options.  Barry Rondinella, Airport Director at John Wayne Airport, states, "We are excited to welcome a new airline partner, Spirit Airlines, to John Wayne Airport.  Spirit Airlines joins our diverse group of carriers with routes servicing Las Vegas and Oakland, providing additional travel options for our passengers."  John Kirby, Vice President of Network Planning at Spirit Airlines, states, "We are excited to bring more low-cost options to our Southern California Guests with new service to John Wayne Airport. Whether it's a quick trip to Las Vegas or to the Bay Area, Los Angeles area residents will love our low fares, signature service and on-time performance."


While Spirit Airlines may be facing a lot of competition, the carrier will be starting flights at a perfect time, where demand is depressed.  John Wayne Airport is a slot-restricted airport, with a slot allocation process every year, meaning that every year, departure and landing rights are divided up among carriers.  The airport has a curfew, meaning flights can only operate from 7 AM to 10 PM, as part of an agreement to limit noise.  With the loss of capacity, Spirit Airlines can easily expand without much pushback, since most slots are unused.


Spirit Airlines has Airbus A320neo's and Airbus A321neo's on order to expand its route network.


Spirit Airlines will be operating an Airbus A320 on the routes which showcases 182 seats.  At the front are 8 Big Front seats in a 2-2 configuration.  Big Front seats are Spirit Airlines' version of a business class seat.  Meanwhile, Spirit Airlines has 174 economy class seats in a 3-3 configuration.


While COVID-19 has affected Spirit Airlines and its earnings heavily, it feels like it is still highly optimistic in terms of its outlook.  Spirit Airlines reported $138 million dollars in revenue for Quarter 2 of 2020.  The carrier reported a net loss of $144 million dollars.  


This doesn't mean that the carrier hasn't taken steps towards reducing capacity in its network to match existing demand.  Spirit Airlines reduced its capacity by about 83.2% compared to the second quarter of 2019.  With its reduction in capacity, Spirit Airlines slowly rebounded from abysmal load factors in April, to 80% average load factors in June.  Spirit Airlines currently is scheduled for a 32% percent year over year decrease in capacity for Quarter 3, showing an expected rebound in leisure travelers.


What are your thoughts on Spirit Airlines' expansion at Orange County?  Do you think these are good route network additions?  Leave your thoughts in the comments below.

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