Spirit further postpones plans to launch Chiclayo service

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Spirit Airlines has again shelved plans to launch services to Chiclayo in Peru.

The low-cost carrier was first awarded traffic rights for the Fort Lauderdale-Chiclayo route in early 2007. Last year Spirit told ATI it was aiming to finally launch service to Chiclayo, a coastal city in northwest Peru which currently has no international air service, in the second quarter of 2010.

Spirit CEO Ben Baldanza now says the Fort Lauderdale-based carrier has again postponed plans to serve Chiclayo. "It hasn't yet reached the hurdle point," Baldanza told ATI on the sidelines of last week's Low Cost Airlines World Americas conference in Miami.

He says rising fuel prices and new opportunities to expand Spirit's Colombian operation drove Sprit to decide against launching Chiclayo in 2010. He says Colombia fetches higher average fares than Peru and is closer to the US, making it a more attractive market for expansion.

Spirit currently only serves one destination in Peru - the capital Lima - but later this month plans to launch its fifth destination in Colombia. Spirit now serves the Colombian cities of Armenia, Bogota, Cartagena and Medellin from its Fort Lauderdale hub and will launch thrice weekly service to Barranquilla on 29 July.

Baldanza says further opportunities to expand Spirit's Colombia network are relatively limited because there is no room for new flights to major Colombian cities in the current Colombia-US bilateral. Smaller destinations such as Armenia, Barranquilla, Cartagena and San Andres are excluded from the bilateral and enjoy open skies status.

Baldanza says Spirit could potentially expand its Cartagena service, which now operates six times per week. He says San Andres, an island destination off Colombia's Caribbean coast, is currently not a possibility because the airport has not yet been certified by the TSA, a requirement before services to the US can be launched.

Spirit faces increasing competition on all its Colombian routes from Aires, which launched services to Fort Lauderdale from Bogota in November. Aires has since added services to Fort Lauderdale from Barranquilla and Cali and later this month will start competing with Spirit on the Fort Lauderdale-Cartagena route.

Baldanza says Spirit is not competing directly against Aires because Aires "is more a traditional airline" and does not follow Spirt's ultra low-cost model.

According to Colombian CAA data, Spirit carried 77,000 passengers on US-Colombia routes through the first four months of 2010, a 4% increase compared to the same period last year. Aires carried 41,000 passengers between the two countries during this period including over 16,000 in the month of April.

Spirit is now the third largest carrier in the US-Colombia market after Avianca and American Airlines. Aires, based on the April figures, is just behind Spirit in the fourth position.