ANALYSIS: Low-cost US carriers look to eastern US for growth

Washington DC
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US low-cost carriers have migrated east in the last year, launching – or planning to launch — dozens of routes to small cities east of the Mississippi River while adding very few routes to destinations in the American West.

In the year ending in December 2013, the nation’s budget carriers will have added roughly 100 new routes that start or end at an eastern US city, according to Flightglobal/Innovata data.

Those routes account for 82% of the roughly 125 total routes low-cost operators will add nationwide during that year. The data includes routes added by AirTran Airways, Allegiant Air, Frontier Airlines, JetBlue Airways, Spirit Airlines, Southwest Airlines and Virgin America.

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Many of the new eastern routes were picked up by Southwest as it began flying more routes for subsidiary AirTran.

But data also shows that other low-cost operators have swarmed east in recent months with routes to Florida and the Caribbean.

By December, Allegiant Air will have launched 37 new routes in one year, and 27 of those will be to Tampa, Orlando and Punta Gorda, Florida, near Fort Myers on Florida’s southwest coast.

Many of Allegiant’s new Florida routes connect the Sunshine State to small cities in the US east and Midwest, places like Concord in North Carolina, Youngstown in Ohio, Bangor in Maine and Moline in Illinois.

Allegiant’s eastward push has been mirrored by Denver-based Frontier, which will have added 20 new routes in the year ending in December 2013, 16 of them to eastern US cities, according to Flightglobal/Innovata.

Frontier recently added new flights from Wilmington in Delaware to Florida, Chicago and Denver. It also added routes from Trenton in New Jersey to Florida, Columbus in Ohio, Detroit and Atlanta.

In addition, Frontier has began flying from Pittsburgh and Chicago to international destinations like Cancun and Huatulco in Mexico.

New York-based JetBlue will have added 11 new routes by December, most of them from New York and Boston. The carrier also plans to begin flying from Worcester in Massachusetts to Florida in November.

Michael Boyd, chairman of aviation consulting firm Boyd Group International, says carriers are primarily battling over leisure traffic to Florida, hoping low fares will generate travel demand from secondary cities.

But he says Allegiant and Frontier’s impact are minimal because the carriers typically only operate a few flights on each route weekly.

And Allegiant is also more a travel company than an airline, Boyd adds, noting that it can keep airfares low by also selling hotel and rental cars.

Boyd thinks the eastward reach indicates that most of the country’s prime routes have been “picked clean,” leaving carriers searching for scraps in secondary markets.

“How much more [traffic] can you generate,” he asks.

Cutting western routes

Data shows that as low-cost carriers have grown eastward, they have also cut more flights in the US west.

By December, the low-cost operates will have eliminated roughly 70 routes nationwide in one year. Of those, 47, or 68%, are to or from a US city west of the Mississippi River, according to Flightglobal/Innovata.

Cuts have been made by Southwest at Albuquerque, Reno and other destinations, and Frontier has nixed five routes from Colorado Springs.

Though Allegiant has added some routes to Hawaii and Provo in Utah, the carrier has also cut seven routes from Oakland.

“Take out Allegiant, there is almost nothing being added on the west coast.” says Boyd.

Miramar, Florida-based Spirit, however, has grown west in the last year, adding new flights to Minneapolis, Dallas, Phoenix, Las Vegas and Los Angeles.