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.
Sign up for the free daily TPG newsletter for more airline news!
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.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | 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. |
| 4X | 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. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
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 $8,000 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.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.