Spirit's network chief explains the airline's 11-destination mid-pandemic growth spurt

The pandemic isn't getting in the way of Spirit Airlines' growth plans.

Though many major network carriers are still slowly rebuilding their networks and waiting for long-haul travel to meaningfully resume, Spirit is well ahead of the curve; In July 2021, the carrier plans to operate even more flights than it did in the same month of 2019, despite the fact that we're still in the midst of the (hopefully waning) pandemic.

In fact, according to TPG's exclusive interview with John Kirby, the airline's vice president of network planning, Spirit's July 2021 operation will the largest ever in the airline's 38-year history.

Though the airline hasn't grown like Southwest — the Dallas-based carrier has added or announced more than 15 new destinations and nearly 100 new routes since early 2020 — Spirit comes in a close second. Since the start of last year, Spirit has added or announced 11 new destinations.

Though it might be counterintuitive for Spirit to be growing during the industry's worst-ever crisis, Kirby says it's all part of the airline's master plan.

2021 is the real growth

If you've been following Spirit's latest moves, it's easy to think that the airline has been in growth mode throughout the pandemic.

But that's not actually the case. Kirby was quick to point out that "I think there's a misconception that we've been kind of growing like crazy across the whole pandemic. The reality is in 2020, we added far fewer routes than any other airline."

Kirby cited examples of Bozeman and Palm Springs as two of the hottest mid-pandemic destinations, thanks to the abundant outdoor activities with plenty of social distancing. Though many of its competitors quickly boosted flights there — Bozeman alone saw a 70% in flights in June 2021 compared to June 2019, according to Cirium schedules — Spirit didn't jump on this sharp increase in demand.

"It was far riskier to jump into some of these markets where we had no historical presence, no really good working knowledge, than to bring back our historical networks."

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Airline industry analyst and president at Atmosphere Research Group, Henry Harteveldt, agreed that Spirit made the right move to not go into these markets. "If Spirit feels that demand for travel to some of these destinations, whether it's Palm Springs, California; Bozeman, Montana; Jackson Hole, Wyoming; or wherever else, warrants, perhaps they will add it to their network next year."

But, Harteveldt mentioned that "just because they could add a place or a destination doesn't mean that their core customer would want to go there." He cited high hotel or home rental rates as a reason Spirit flyers might avoid some of these popular mid-pandemic destinations.

So instead, the airline stayed true to its pre-pandemic network strategy and decided to restore much of the service it cut in early 2020.

But things changed for Spirit and Kirby in January 2021. Travel demand was returning, the pace of vaccinations was increasing and local COVID-19 restrictions were easing. "Really it was about getting back to our growth plan again," he told TPG.

It's about playing catch-up, he said, for all the new dots he planned to add in 2020. For instance, Spirit planned to announce its new Milwaukee service last June at the JumpStart Air Service Development Conference in Reno, Nevada.

Now, with all of the postponed plans, 2021 is shaping up to be a blockbuster year for the airline. It's already announced seven new destinations, taken delivery of a slew of new yellow Airbus jets and plans to "grow over 30-plus percent next year."

The focus is Florida, Las Vegas and L.A.

For Spirit, the trajectory of the travel recovery might actually favor its network model of taking leisure travelers to vacation destinations. Kirby agreed: "I would say it's fair to say we got lucky here that our model fits the post-pandemic environment."

Though business travel hasn't yet meaningfully returned, airline executives and industry analysts keep reiterating that leisure travel has recovered to pre-pandemic levels. People want to hit the road once again, whether it's a beach vacation in Florida, a family trip to Disney in Orlando or a few nights in Las Vegas.

Harteveldt told TPG that "one of the things that Spirit recognizes is that because it is a leisure-focused airline it has a unique opportunity to pursue leisure travelers as they take to the skies once again."

That's great for Spirit, which has a massive operation in South Florida, primarily in Fort Lauderdale, but service to Miami is about to commence with a whopping 30 routes. It's also the second-largest carrier in Vegas, and it's one of the largest ultra-low-cost airlines in Los Angeles.

"We were fortunate that we were able to keep, and not have to take as much risk in terms of new markets during the pandemic because our network was really geared towards where the demand was... if you think about where people go on vacation, it's Florida, it's Las Vegas and ever since California re-opened in mid-June, people are going to go to California."

The pandemic has unleashed opportunities

Though Spirit's recent growth has largely been following its five-year plan according to Kirby, the airline has seized some mid-pandemic opportunities that it hadn't originally predicted.

For one, adding service to the John Wayne Airport in Orange County, California, was accelerated. Kirby told TPG that "one of the first things I did [when I got to Spirit about three years ago] was put us on a waiting list for John Wayne because it's going to be years before we can get in." (Flight numbers at the Orange County airport are governed by a 1985 agreement designed to limit noise for the surrounding communities.)

But during the height of the pandemic, Kirby received a lucky email saying slots had become available for one new entrant to the airport, but only if the new service started in 2020.

"So I thought, well, we're 10 [on the list], there's no way we're going to get these slots, but hey, what the heck I'll put in for them anyway... And the other nine airlines didn't do it, and we were able to jump in."

In addition to adding service to John Wayne, Spirit landed some valuable "real estate" during the pandemic, according to Kirby. In New York's LaGuardia Airport, the airline recently split its operation into the Marine Air Terminal, a far more convenient and quieter concourse located on the west end of the airport.

Additionally, in Los Angeles, Spirit secured more capacity at LAX, where it added another gate in Terminal 5 to its existing operation.

Point-to-point flying is still the winner

With all the changing market dynamics, Spirit's still sticking to its time-tested network strategy of operating point-to-point flights. Though the airline has touted the variety of one-stop itineraries you can now purchase in many of its new cities, the focus is still on adding more nonstop flights, not on building a hub-and-spoke model.

"Even though I think we've gotten comfortable and people have gotten vaccinated, the throngs of people that you see at some of these massive connecting hubs probably makes people nervous," Kirby said.

If there's one market that acts as a hub for Spirit, however, it's Fort Lauderdale. With 101 departures, there are plenty of one-stop itineraries for those heading to the Caribbean, Latin and South America.

Nevertheless, the airline's focus is on point-to-point flying, even in Fort Lauderdale. As the airline keeps growing its presence there, the timing of its flights won't always line up nicely for connections.

According to Harteveldt, that's the right move. "Spirit has to think through whether the added revenue it would get by embracing the hub-and-spoke model in certain cities is worth the added investment and expense necessary to do that," he said.

Competitors are everywhere

In Kirby's mind, "everyone is a competitor." Whether it's a global behemoth like one of the U.S. Big 3 or another discounter like Frontier, Spirit is going up against a range of different airlines.

Though some of Spirit's competitors might go into markets for the short term — JetBlue recently cut a whopping 27 routes, many of which it added during the pandemic — Spirit takes a longer-term look at its network adjustments. "We're very careful what we go into and we go into assuming it's a long-term part of the network," Kirby said.

But the market dynamics are changing. There are two new ultra-low-cost airlines in the U.S., Avelo and Breeze, both of which are trying to make plays for underserved markets in mid-tier and smaller cities.

If the new entrants stick to their playbook, Spirit likely won't have to worry about them though. Kirby said "I know Dave Neeleman [the founder of Breeze] and I know when he talked about what his model was, it was flying between places that nobody's in or nobody ever will be in. So if that's the case, I would expect very little competition."

What's next for Spirit

Spirit's not done yet, according to Kirby.

"We're going to double in size in the next five years," he told TPG. Most of that growth comes from new aircraft deliveries: "we're going to go from about 160 planes today, to 320."

As for the network, the demand environment will continue to dictate the carrier's plans. For now, that means adding new cities to the route map and connecting them to Florida, Las Vegas, and — in some cases — L.A, New York and the Caribbean.

In the long run, the carrier may "shift" to its pre-pandemic focus of "heavy leisure" with a mix of business travelers in some key markets.

Of course, however, Kirby can't predict the future. "We're going to continue to read the tea leaves and we'll adjust what we need to," he concluded.