Spirit Airlines (NYSE: SAVE) has continued its rapid expansion this year, growing capacity about 23%. Most of that growth has come through adding new routes between cities that Spirit already served. The budget carrier also added extra frequencies on certain routes.
However, Spirit Airlines continued to enter new cities during 2018 as well. In fact, just this past week, the carrier began service to its eighth and ninth new cities of the year. It now flies to 69 destinations across the U.S., Caribbean, and Latin America, up from 60 at the beginning of 2018. Let's take a look at all of the places where Spirit brought its low fares this year.
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Midsize cities remain the key growth target
Since he took the helm in early 2016, CEO Bob Fornaro (who will retire this month) has made it a major priority to change Spirit Airlines' route strategy. Rather than fighting the legacy carriers in the big hub markets where they are dominant, Fornaro has advocated growth in midsize cities, with a particular focus on connecting those markets to popular leisure destinations like Florida, Las Vegas, and New Orleans.
Spirit stuck to this new route strategy in 2018. Early in the year, the carrier began serving Columbus, Ohio, and Richmond, Virginia. It flies from both markets to its main Florida focus cities of Fort Lauderdale and Orlando. In Columbus, Spirit Airlines also added year-round service to Las Vegas along with seasonal flights during the winter to two other destinations in Florida: Tampa and Fort Myers. In the spring and summer, it offers seasonal service to Myrtle Beach, South Carolina, and New Orleans.
Spirit Airlines continued in the same vein in the fall. In early September, it began flying from two smaller cities in North Carolina -- Asheville and Greensboro -- to Fort Lauderdale, Orlando, and Tampa.
Finally, Spirit capped off the year by beginning service to Jacksonville, Florida, this past week. It currently offers daily flights to Chicago and Detroit. It will also add daily service to Baltimore-Washington International Airport and Fort Lauderdale in February.
More international growth, as well
International markets are Spirit Airlines' other main growth priority right now. International routes frequently have less competition, so there are substantial opportunities for the carrier to stimulate additional traffic with its low fares.
Spirit Airlines began flying from Fort Lauderdale (its No. 1 focus city) to three new international destinations this spring. In March, it started service to Guayaquil, Ecuador. A few weeks later, it launched flights to Cap-Haitien, Haiti. To round things off, Spirit began flights to St. Croix in May.
Earlier this week, Spirit added its fourth new international destination of the year, launching a route from Fort Lauderdale to Cali, Colombia. Cali is the airline's 28th destination outside the continental U.S.
Expansion will continue in 2019
It took a while for Spirit Airlines' new route strategy to start paying dividends, but it has finally come into its own this year. Unit revenue rose 5.5% last quarter, and management estimated in late November that unit revenue would surge 11% year over year in the fourth quarter.
Thus, Spirit Airlines has every reason to stick with the same strategy in 2019. Last month, the carrier announced that it will begin flying to Austin, Texas, in February. By May, it will offer nonstop service from Austin to nine destinations across the U.S. More recently, Spirit revealed that it will begin serving Indianapolis in March, with nonstop service to Orlando and Las Vegas. Seasonal flights from Indianapolis to Myrtle Beach will begin in May.
While Spirit Airlines plans to slow its growth rate next year, there could still be room for the carrier to add more new cities later in the year. There is plenty of white space left in the Caribbean and Mexico. Spirit could also continue its expansion in midsize cities by offering flights to Florida from places like Knoxville, Louisville, Memphis, Nashville, Norfolk, or St. Louis -- just to name a few possibilities.
Spirit Airlines clearly has lots of opportunities for expansion. We'll have to wait and see what its highest growth priorities are for 2019.
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