Fleet decisions by major carriers will heavily impact airports and overall traffic levels in the next year or two, John Kirby, vice president of network planning, Spirit Airlines, said Wednesday.
Speaking on the weekly industry call hosted by the Airport Restaurant & Retail Association (ARRA), Kirby noted that major carriers have not yet culled their fleets in the wake of the pandemic, as they did in the post-9/11 environment. That could still happen, or carriers could make other decisions that impact the fates of airports and travelers.
“A lot of it has to do with fleet decisions by the big carriers,” Kirby said. “What they decide to do will dictate how much capacity they have, and based on that capacity level they’re going to have to make decisions on where they invest. If carriers are 20 percent or 25 percent smaller, they’re going to have to pull 25 percent of the capacity from somewhere. In some cases that might be de-hubbing, which we saw in the last great recession back in 2009.”
Newer focus cities and airports could be vulnerable, he added. “I think generally the rule of thumb is the last thing [invested in] is probably the first thing to go away,” as those tend to be smaller and less strategic. “I think that could probably lead you in the direction of what might come down if carriers are forced to shrink that capacity.”
As the entire industry looks to rebuild, Kirby acknowledged that airport concessions are an integral part of the airport offering. He discussed the overall goal of making the travelers feel safe, noting the roles of concessionaires and airports in paving the way for a safe experience that will encourage people to return to flying. When recovery will happen is still somewhat unclear, he acknowledged, but he says ultra low cost carriers like Spirit are in a better position than some others, and could approach 2019 traffic levels as early as next year.
“What’s come back is the leisure demand, the VFR [visiting friends and relatives] demand,” Kirby said. “Especially with the promising news of a vaccine. I think by the middle of next year…is our best case” for recovery. Once vaccinations are underway, “there will be pent up demand and people want to take vacations or see their loved ones,” which will benefit carriers like Spirit. Others carriers will continue to struggle. “For the legacy carriers are carriers that depend on a high volume of business travel, I think it’s going to be years,” he said. “I just don’t see a business travel coming back as quickly.”
