LAS VEGAS— Day one of the International Aviation Forecast Summit (IAFS) brought nearly 20 different speakers on stage, each keen to share their take on the industry and to engage with host Michael Boyd in friendly dialog about what the next year and beyond will bring. If you were hoping for deep, insightful analysis from a session titled “Restoring Fair Competition to the Skies” then you’d probably find yourself disappointed but a number of the presentations offered interesting insights into the way carriers view the future. Not surprisingly the smaller airlines were much more open and offered a more interesting level of detail than the bigger players.
JetBlue CEO Robin Hayes was on the agenda and spoke to the carrier’s growth plans, including the previously announced expansion of Mint and also the new JFK-Palm Springs service announced earlier that day. Speaking about route and schedule planning he made it clear that connections are not the carrier’s focus, even if they do happen from time to time. “We are still mainly a point-to-point carrier. That’s how we want to stay.” Less than 20% of the traffic flow across the operation is online connections and the company admits that sometimes the routings or schedules simply do not work for those trips. Don’t expect that to change any time soon.
CEO David Cush was incredibly frank with the group, speaking to the challenges his company faces in expanding. With significant aircraft deliveries scheduled over the next several years there will be a massive growth plan organized and currently the carrier’s main airports are, for the most part, slot and/or gate restricted. That’s going to mean major hurdles to manage the growth. Cush was adamant that the A320 family will be the only aircraft type in the fleet while he’s at the helm but also lamented that the A321s aren’t in the fleet yet, noting:
We love the A321. We would have that airplane in our fleet right now if negotiations with Airbus had gone differently. I expect that we’ll have the 321 in our fleet soon.
He also spoke about the service at Love Field in Dallas and the choice of routes there. Austin is not an ideal choice of a destination due to its limited gate availability but the company wants to make sure that it is showing full utilization to avoid needing to share the gates with competition. He hopes that another more business-focused (and higher fare) destination such as Chicago can work. Then again, Chicago was one of the initial destinations announced and there were issues with gates at O’Hare which nixed that plan last year.
Frontier CEO Barry Biffle spoke about the massive turnaround he’s presided over at the carrier, including a return to profit amidst a 25%+ cut in CASM ex-fuel. A year ago the carrier operated more than 100 “day of week” routes where service was not daily. Today that number is down to six. This is just one of the major shifts in the operating models which Frontier has pursued in order to return to profitability.
Spirit was keen to inform the crowd about how customers now hate it less than they did a couple years ago. This is, in part, because the company has done a much better job of educating its passengers about the “Bare Fare” approach and the ancillary costs associated with travel on the carrier. Paul Berry, the carrier’s Director of PR, Brand and Advertising suggested that passenger approval ratings are up 40% year-over-year thanks to those campaigns. The company has also adjusted its marketing efforts to be more on point with respect to the unbundled costs, “Our provocative ads now have a purpose.”
The Viva Group is looking to build a cross of Ryanair and Air Asia in the Latin America market. The low costs, secondary city service and bare-bones, no frills approach will come from the Ryanair side of the legacy. The operating and ownership structure will be more of an Air Asia approach, with franchises and partial ownership, a necessity when operating in a region where ownership and operational restrictions vary significantly by country. Group CEO Joe Mohan is excited about growing from the two current operations (Colombia and Mexico) into several more, driving down the cost of airfare within the region. He recognizes that business travelers are likely to stick with the established brands but that doesn’t faze him, “This isn’t about stealing market share. It is about creating new markets. The competition is the bus.”
American didn’t have much in the way of big news, but it did announce details about three new heritage liveries which are coming soon: TWA, AirCal and Reno Air. That’s good news for the AvGeek community.