Both airlines have been hard at work to shore up operational results after struggling to provide consistent levels of operational reliability in the 2015-2016 time period. One of Spirit CEO Bob Fornaro's goals when he took the helm at the airline two years ago was to strengthen the airline's operational weaknesses.
OAG's calculations show Spirit's on time performance improved from 73.92% in 2016 to 76.97% in 2017, more than a three percentage point improvement.
Previously, Spirit has explained it has no ambition to rise to the top of on-time performance metrics, but an improved operational performance gives credence to its business model over the long term. The airline's logic is posting an improved performance in certain operational metrics smooths out Spirit's rough edges, and makes the airline's product value stand out in a competitive environment when its fares are being matched. During 2016, Spirit stated its goal was to consistently post an on time performance in the mid-70s.
Spirit and Frontier's larger competitors have been rolling out their answer to those airlines' ultra low fares through their basic economy fare tiers. American Airlines, Delta Air Lines and United Airlines all have the basic economic option available in the US domestic market, and Delta offers that fare tier on certain trans-Atlantic flights.
Spirit has consistently maintained the threat posed by basic economy fares is minimal, and is more of a revenue management tool for American, Delta and United. Indeed, American has cited 50% upsell rates from its basic economy product.
US ULCC Frontier has also been working to shore up its operational performance. Its 78.91% performance during 2017 was roughly a 3% improvement year-on-year. In OAG's 2017 results, Frontier ranked higher (11th) in on time performance among global LCCs, which was above Southwest Airlines (13th) and Canadian low cost airline WestJet (15th). Spirit's ranking among LCCs was 14th.
Both Spirit and Frontier have improved their operational performance against the backdrop of robust capacity expansion. Data from CAPA and OAG shows Spirit's ASKs increased approximately 17% year-on-year in 2017 and Frontier's growth reached 24%. Each airline remains in growth mode, concluding ample stimulatory opportunities exist in the US market.
Now the challenge for Frontier and Spirit is to maintain the momentum they've reached in improving their respective operations. As the titans of the US airline industry work to compete more effectively with ultra discounters, Frontier and Spirit need to deliver a consistently positive customer experience; operational reliability is the backbone of favourable customer perception.