High fuel prices turn MD-80s into "challenged aircraft"

Spirit Airlines is in talks with Airbus to accelerate deliveries of A320 family aircraft as high oil prices hamper the fast-growing low-cost carrier's ability to turn a profit from its 33-strong fleet of fuel-thirsty Boeing MD-80s.

"We are discussing that because none of us believes that the current fuel situation will abate," says Spirit chief executive Jacob Schorr. Meanwhile, the airline is considering a longer-term move into 100-seat-class regional jets.

Spirit has received four A321s on interim lease and in March will accept the first of 35 International Aero Engines V2500-powered A319s and A321s on firm order, including some on operating lease.

Schorr says the MD-80 hasbecome a "challenged aircraft" because Spirit's A321s are burning "13-14% less trip fuel" despite carrying 48 more passengers in the airline's two-class layout. The first two MD-80s will be withdrawn in January and the fleet roll-over is due to be completed by 2007 following delivery of 29 138-seat A319s and six more A321s, some leased from International Lease Finance. Schorr says Spirit is discussing the feasibility of compressing the delivery schedule by up to six months.

The baseline A320 is not now part of Spirit's fleet plans because the larger A321 offers lower seat-kilometre costs, while the smaller A319 has lower trip costs, which "gives us extreme flexibility in scheduling aircraft", says Schorr.

Regarding a possible move into Embraer 190-class large regional jets, Schorr says: "I think from our cities that would work. The MD-80 transition must be completed before we really look at that."

Spirit - the USA's largest privately held airline - has operating bases at Fort Lauderdale/Hollywood International and Detroit Metro airports. It expects to carry nearly 5 million passengers in 2004 and post revenues of around $500 million. It is forecasting 10% growth for 2005.

Majority-owner Oaktree Capital Management, which injected $125 million into the carrier earlier this year, is expected to eventually dispose of its stake, possibly via an initial public offering.

LHT gains TCS customer

Spirit Airlines has become the US launch customer for Lufthansa Technik's (LHT) total component support package after signing a 15-year deal covering its Airbus fleet. LHT chairman August Henningsen says he expects more North American carriers to outsource component support despite their initial reluctance. "It is a natural change that is happening now in the USA," says Henningsen. "Pre-9/11, airlines had their own resources - this has changed tremendously".


Source: Flight International