A glut of cheap lease rates on Airbus A319s has clearly caught the attention of Spirit Airlines, but so far has not significantly changed the low-cost carrier's growth strategy.
Market analysts took note when Spirit leased three used A319s in the fourth quarter, despite an ample order backlog for larger A320s and re-engines A320neos.
But Spirit's executives tried to diffuse expectations that the availability of cheap A319s might prompt the airline to accelerate an already fast-growing network expansion strategy.
"We're going to evaluate all opportunities," says chief marketing officer Barry Biffle, addressing analysts on a teleconference about fourth quarterly earnings today. "We have a decent-sized order book that we have put out there. We'll weight those opportunities against that of the existing orders we have."
Spirit chief executive Ben Baldanza also noted that the three, used A319s leased during the last quarter had a prior connection the airline.
As a global economic crisis began taking hold in 2008, Spirit Airlines returned seven A319s to a lessor.
"The three we're bringing back are three of those seven," Baldanza says.
Those aircraft had been leased to other airlines and require some modifications to enter service in Spirit's operations, but the airline is at least familiar with their operational and maintenance history.
"It's a smaller issue than just going out and getting and airplane we had never seen before," he says.
In the future, the growth strategy for Spirit is to grow by adding new aircraft from its order book, with few opportunities of adding capacity to its existing fleet by simply increasing the number of seats on board the aircraft.
Baldanza says Spirit's 145-seat A319s are already operating at the maximum seating density allowed by the US Federal Aviation Administration. Spirit's 178-seat A320s and 218-seat A321s, meanwhile, are operating at one seat below the maximum allowed by the government.
Spirit's growth strategy, meanwhile, continues to produce results at levels that don't suggest diminished returns.
The carrier launched service in 11 new markets during the fourth quarter and plans to open service to 17 more destinations in the first half of 2013. However, a few markets have not worked out recently as Spirit expected. The airline normally expects to break-even on a new route within eight months and turn a profit in the first full year of operations.
But Spirit acknowledges cutting newly opened routes from Las Vegas to Phoenix and Fort Lauderdale and Nassau, Biffle says. Meanwhile, other routes were reduced from year-round to seasonal service during the second half of last year.
"It's a simple case of demand did not stimulate at the level we expected," Biffle adds.