ULCC pioneer Indigo Partners believes US ultra low cost airlines could grow their domestic market share well into the double digits during the next seven years.
Speaking at the CAPA – Centre for Aviation Americas Aviation Summit 2018 in Houston, Texas, Indigo Partners managing partner William Franke stated Frontier and Spirit Airlines presently hold a combined 6% share of the US market. But with healthy orderbooks, those airlines should chart 15% to 20% annual growth during the next new years.
Indigo ordered 134 Airbus narrowbodies for Frontier in late 2017 as part of massive 430 aircraft order with Airbus for its portfolio of ULCCs that also includes Volaris, Wizz and JetSMART.
As that growth continues, Mr Franke believes Frontier and Spirit’s market share could reach 20% during the next seven years. Citing the potential for ULCC growth in Americas, Mr Franke remarked LCCs and ULCC account for 42% of pan-European travel.
With its full ownership of Frontier and JetSMART, and a stake in Volaris, Mr Franke concluded “it is safe to say” Indigo has an “close up view” of where the Americas ULCC market may be heading.
Concluding the ULCC model has brought great change worldwide Mr Franke declared: “I wonder what else we can do…are innovative codeshares between ULCCs a logical evolution of the model?”
Indigo’s ULCCs Frontier and Volaris have declared their intent to create a codeshare, and Volaris has stated the pact will add 20 new destinations to its network and 80 new routes between Mexico and the US.
Mr Franke acknowledged “codesharing brings a certain level of complexity to the model”, but in the case of Frontier and Volaris, Indigo believes the partnership creates mutual revenue generating opportunities. “Let’s always remember to think outside the box,” he declared.