Senior network planning executives from a range of North and South American low-cost carriers repeated statements from their leaders that lower fuel prices will not cause them to accelerate their capacity and growth plans, at least for the time being.
For an industry where capacity discipline has been a watchword over the past couple of years this comes as little surprise. In network terms falling fuel prices mean “very little in the short-term”, said David Clark, vice-president network planning at JetBlue Airways, speaking at the Routes Americas Strategy Summit taking place in Denver.
There is a great financial benefit to a carrier like GOL in falling fuel prices, which represent 40% of its cost base, says Rafael Araujo, manager network planning, but he stresses that the Brazilian carrier “will take it slow and see where it goes. Let’s not make any aggressive manoeuvres in case it goes back up and then we’ll be in very bad shape.”
While falling fuel prices may not alter strategic outlooks for now, there are side benefits that won’t be overlooked. “Small tactical decisions, such as the viability of marginal services, will become easier,” says JetBlue’s Clark.
According to Vijay Bathija, vice-president commercial at Air Canada Rouge, falling fuel prices do “reduce barriers to entry”. Frontier president Barry Biffle says that “in the near term it allows growth to be a lot easier”.
Source: Cirium Dashboard