Can San Juan handle all of Frontier and Spirit's new flights?
Competition is rising with the tide in Puerto Rico, with Frontier Airlines and Spirit Airlines piling on new flights to sun-soaked San Juan.
In just the past week, Frontier has announced four new routes, and Spirit four additional flights to San Juan's Luis Muñoz Marin International Airport (SJU). These additions come even as Wall Street analysts flag the market as one seeing high levels of competition -- something that can be good for travelers in the short term but, potentially, not in the long term.
Denver-based Frontier will connect San Juan to Baltimore/Washington (BWI), Boston (BOS) and Santo Domingo, Dominican Republic (SDQ) in April, and Chicago O'Hare (ORD) in May. South Florida-based Spirit, which launches new service to the city from Boston and Newark (EWR) this month, will add flights to Newark and Orlando (MCO) in February, Philadelphia (PHL) in March, and Baltimore in May.
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San Juan's largest carrier, JetBlue Airways, has not announced any new routes or additional frequencies to the city for 2020. On top of that, while the New York-based carrier's seats in San Juan will be up 10% year-over-year in 2019, they remain nearly 2% lower than in 2016 -- the last full year before Hurricane Maria hit Puerto Rico, taking a major bite out of the island's economy.
"Capacity to San Juan, Puerto Rico, remains elevated," wrote Raymond James analyst Savanthi Syth in a report Thursday. Frontier and Spirit, and to a lesser extent Southwest Airlines, are the main drivers of the added capacity, she added. JetBlue, on the other hand, faces "pressure" from these additions.
Related: Frontier adds four San Juan routes amid 25-route growth spurt
Elevated capacity tends to be good for consumers by driving fares down, while at the same time shrinking profit margins for airlines. This can be good over the short term as carriers duke it out for market share but long term, particularly if there is an economic slowdown, weaker airlines may raise a white flag and pull back -- ultimately leaving fewer options for consumers.
San Juan has seen this before. American Airlines operated a hub at the airport from 1987 but, following the 2008 financial crisis and ensuing recession, closed the hub in 2011. American's decision coincided with JetBlue's expansion at the airport, which it officially named a "focus city" in 2012.
Room at the casa?
"Definitely, there is room for growth not just for Spirit and JetBlue but for all others," Jorge Hernandez, CEO of San Juan airport operator Aerostar Airports, told TPG. "There are still many destinations that remain unserved with direct flights."
Hernandez said San Juan's forecast 12% year-over-year increase in passenger numbers in 2019 is "healthy" growth, and added that Aerostar expects this trend to continue into 2020. The airport anticipates passenger traffic to pass the 10 million mark next year.
Echoing Hernandez's comments, Spirit spokesman Field Sutton told TPG that the airline sees "additional opportunities between Puerto Rico and the mainland" and plans to announce more new routes soon.
Related: Spirit Airlines to take on JetBlue with 2 new Puerto Rico routes
Spirit is on track to nearly double in size in San Juan this year, with seats up an impressive 95% year-over-year, Cirium schedules show.
"Demand and competitive capacity challenges... ramped [up] significantly through the summer," JetBlue president Joanna Geraghty said of the airline's Caribbean and Latin American business in October. She specifically named the Dominican Republic and Puerto Rico as markets where JetBlue is "committed" despite competitive pressures.
Asked about Frontier and Spirit's recent additions, JetBlue spokesman Philip Stewart said the airline is "very pleased" with its San Juan operation. He added that local customers like its complimentary inflight amenities, including seatback entertainment, Wi-Fi, and snacks and non-alcoholic beverages, that are either only available with a fee or unavailable on its ultra-low-cost competitors.
Stewart said JetBlue plans to continue to grow in San Juan, dependent on demand, in 2020.
What JetBlue growth in San Juan will look like is unknown. The carrier is publicly focused on growing at Boston and New York John F. Kennedy (JFK), and particularly the former where it faces increased pressure from Delta Air Lines. Recent announcements emphasized added service to Boston, including an expanded shuttle to New York LaGuardia (LGA) and Washington Reagan National (DCA), and new routes flown with its new Airbus A321neos from JFK.
Related: JetBlue boosts LaGuardia shuttle amid Boston expansion
Growth in San Juan does not appear to be abating. Frontier plans to grow by roughly 15% in 2020 suggesting more new routes are coming. Spirit is even more direct with its definite plans to continue expanding in Puerto Rico.
"The prospects for growth remain quite favorable in the out years," said Hernandez looking beyond next year. He reiterated that, at least according to the airport, there is demand for both more domestic and international markets.
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.