Skift Take
If you're an investor, it's not clear Spirit's model is the right one. But if you're a passenger, you should love the airline, even if you never fly it. Spirit is responsible for many of the U.S. fare wars we've seen in recent years.
As investors fret that at least two major U.S. carriers plan to add considerable capacity in smaller cities, airline executives tell them not to worry because they have a secret weapon — their massive hub-and-spoke systems.
On their own, new flights like Charlotte to South Bend, Indiana from American Airlines or Chicago to Wilmington, North Carolina on United Airlines may not make sense. But United and American can shuttle small-city passengers through their hubs to hundreds of cities across the United States and the world.
"Charlotte and Dallas are the second-and third-biggest hubs on the earth, and when we fly markets from both of those two hubs, we create a significant amount of connections," Vasu Raja, American's vice president for planning, told Skift last week. "The revenue generating power of that is amazing."
Similarly, United President Scott Kirby told investors last month, "a hub and spoke airline is really a manufacturing company and it is about manufacturing connections."
Ultra low-cost carriers like Spirit Airlines and Frontier Airlines
