Spirit has spent the last few years remaking itself in the public eye. It has gone from a Detroit-based low cost carrier to what is now considered a Ft Lauderdale-based ultra low cost carrier. The focus has gone from domestic flying to the Caribbean, but now Spirit is turning its eyes back on the US and yes, Canada. With a profitable operation, new airplanes coming online, and a fantastic cost structure, Spirit is now hunting for its next growth opportunity.

There are several new routes being announced, and I think they can be grouped into a couple different categories.

• Ft Lauderdale and Myrtle Beach to Plattsburgh, NY; Niagara Falls, NY; Latrobe, PA; and Charleston, WV with less than daily service
• Dallas/Ft Worth to Ft Lauderdale and Las Vegas twice daily
• Myrtle Beach to Washington/National daily

So what’s going on here? Most of these are an attempt to get Spirit in on the Allegiant-model. Plattsburgh and Niagara Falls are without question targeted at those pasty-white Canadians looking for sun:

Allegiant long ago figured out that if you fly close enough to the Canadian border, Canucks will flood across to save on all the insanely-high international taxes. That’s why Bellingham (near Vancouver) has been such a boon for Allegiant, as have other unlikely places all along our northern border. Now Spirit wants in on the act. Niagara Falls is tougher because Buffalo and its low cost carriers are nearby, but Plattsburgh is all alone far from, well, anything. Granted, Spirit won’t be alone at Plattsburgh since Allegiant already has a substantial presence there, but it’s still worth taking a shot.

Latrobe and Charleston look like more traditional Allegiant-style flights carrying people from small towns to big city vacation destinations. Charleston isn’t exactly a small town, but it does serve many small towns in the state of West Virginia with little low cost service around. Allegiant chose to fly 50 miles down the road in Huntington instead, so this is an opportunity for Spirit. Latrobe is only 40 miles southeast of Pittsburgh, but that one has me scratching my head. I mean, Pittsburgh’s airport has low cost service already and is an easy airport to use. I’m not so sure that this one makes sense, but my guess is that Latrobe is paying for the privilege somehow so Spirit figures it can see what happens.

The Dallas moves are obviously completely different. This to me looks like an effort to finally crack that nut, something that has escaped airlines until now. Spirit has gone into Dallas before and quickly pulled out. Maybe now with a better cost structure and Virgin America coming in from the West Coast, Spirit thinks it can withstand the inevitable American onslaught. Spirit’s twice daily flights to Ft Lauderdale will help give strong, low cost connecting opportunities into Caribbean destinations, so that should be the focus. After all, American has kept Caribbean fares high for a long time. Not so sure about that DFW-Vegas run. I suppose the closest thing to a low cost carrier on that route is US Airways, so maybe there is an opportunity. If it doesn’t work, I’m sure it can disappear quickly.

And that last Myrtle Beach – National flight? Bleh. Just taking advantage of slot actions at National, I assume. Might as well lump that into the rest of the announcement.

While I’m lukewarm on some of these cities, I think Spirit is doing the right thing. The airline is going to start experimenting further with its ultra low costs. There have to be more places that will work for them, and they aren’t all in the Caribbean. Look for more cities to come online as Spirit looks to see what works and what doesn’t.

As you well know by know, Southwest held its sometimes-annual Media Day in Dallas last week, and this year there was no way I was missing it. Last year I got sick and couldn’t make it, so I loaded up on vitamins and made sure I would be in good shape this year. Thanks to the Wright Amendment still hanging around in its dying days, I had to stop somewhere on my way to Dallas, so I opted for the quickest, most-direct options via El Paso one way and Albuquerque the other. I like the two short flights better than one long (to Austin/San Antonio/Houston) and then a really short flight up.

How’d it go? Typical Southwest. They do short hauls really well, in general. And yes, this flight was provided by Southwest at no charge (as was my hotel stay).

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October 27, 2010
Southwest 37 Lv Los Angeles 915a Arr El Paso 1205p
Los Angeles (LAX): Gate 7, Runway 24L, Depart 10m Late
El Paso (ELP): Gate B6, Runway 22, Arrive On Time
N728SW, Boeing 737-7H4, Canyon Blue, ~66% Full
Seat 6F
Flight Time 1h35m

I hit bad traffic on the way to LAX (why I choose Long Beach when I can), but I relaxed when I found that the security line was non-existent. Very strange for this terminal, but I wasn’t complaining. They did, however, send us up some stairs to get to the auxiliary security screening area and the woman in front of me was having a heck of a time with her suitcase.

Once through, I went over to gate 7, an old America West gate that got me daydreaming about the good old days. I went to the podium to exchange my paper ticket for a boarding pass (they still require paper tickets for flights provided by Southwest), and a minute later, I had my boarding pass and I went looking for laptop power.

Fortunately, the new Southwest gate areas were available here and that meant seats with power. Unfortunately, the first four outlets I tried didn’t work. One worked if you held the plug in but that wasn’t going to happen. Finally, someone left his seat and I found one that worked.

Our plane pulled up right on time, and soon we were boarding. The crew must have been Dallas-based, because they had that accent as well as that informal charm that always screams Southwest. The first flight was quick and painless and I enjoyed my ginger ale as we flew toward El Paso.

The only complaint? The guy behind me was an insanely-aggressive typist. I’m guessing he was writing an angry comment on a blog, because rarely do people ever put so much purpose into their typing. I felt every keystroke in my back, but fortunately, he hopped off in El Paso.

Soon we were descending (actually dive-bombing, another trait of a traditional Southwest pilot) into El Paso and all was well.

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October 27, 2010
Southwest 37 Lv El Paso 1225p Arr Dallas/Love Field 3p
El Paso (ELP): Gate B6, Runway 26L, Depart On Time
Dallas/Love Field (DAL): Gate 11, Runway 31R, Arrive 5m Early
N728SW, Boeing 737-7H4, Canyon Blue, ~75% Full
Seat 12F
Flight Time 1h18m

Once we loaded up in El Paso, we were off like a shot once again. El Paso departures are interesting because you aim straight at a mountain and then (hopefully) bank left before you hit it. Combined with the always-bouncy air around the area and you get a rockin’ ride until you get above 10,000 feet. Then it was uneventful all the way to Dallas and I was off to Media Day festivities.

After an action-packed day and a long night of drinking, I was feeling pretty happy about my decision to take a 1025a flight back and not an earlier one. I made it to the airport, sailed through security and soon found myself with time to kill.

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October 29, 2010
Southwest 12 Lv Dallas/Love Field 1025a Arr Albuquerque 1115a
Dallas/Love Field (DAL): Gate 11, Runway 13L, Depart 3m Late
Albuquerque (ABQ): Gate A6, Runway 3, Arrive 10m Early
N347SW, Boeing 737-3H4, Canyon Blue, ~75% Full
Seat 9F
Flight Time 1h22m

Love Field is old-school but it is functional. Still I’m glad a new terminal is on the way. It should be done right about the time the Wright Amendment fades away and the experience will be much nicer. But for me, it was fine to just grab a seat by the window on this beautiful blue sky day and read the paper.

The airplane rolled in and I noticed I’d be flying on N347SW. Despite being an old lady (built in 1989), ship 347 was looking good in her new Canyon Blue paintjob. In fact, she was the last one to wear the old colors before getting a fresh coat earlier this year. The paint didn’t hide the years of rivets and patches that show her age, but that just adds character.

The boarding agent wasn’t in much of a hurry to board despite our departure time creeping up. Incredibly, we did all end up sitting and the plane pushed back just a couple minutes late. We launched into the blue and pointed the nose toward Albuquerque. A couple hours later, we were descending into surprisingly smooth air. It’s such a great, scenic place to fly into. We headed to the gate and I sat there waiting to go on the last leg home.

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October 29, 2010
Southwest 12 Lv Albuquerque 1150a Arr Los Angeles 1p
Albuquerque (ABQ): Gate A6, Runway 8, Depart On Time
Los Angeles (LAX): Gate 2, Runway 24R, Arrive 15m Early
N347SW, Boeing 737-3H4, Canyon Blue, ~99% Full
Seat 9F
Flight Time 1h44m

For the first time on this trip, the flight was full and that meant I had the middle seat next to me filled. Bummer. But it turned out that the person was a 20 year flight attendant with United who was commuting in uniform. As you’d expect, we struck up a conversation and talked about her job, United, and the industry all the way to LA. While I usually want to be left alone, I really enjoyed this conversation. The only thing that interrupted us was when I realized that we were flying right over Sedona and its deep red rocks. Had to watch that.

But the conversation went quickly and soon enough, we were on the ground. I headed off to the shuttle bus station so I could catch the bus back to the train to get me home.

For years we’ve heard Southwest talk about how its reservation system was preventing the airline from doing all sorts of things. International flying and codesharing are the big two that have been publicly discussed lately, but there are more things that can’t be done because of its ancient system. Despite these issues having been raised for years and year, we’re still at least three years away from a new system coming online. At Media Day last week, I sat with Bob Jordan, EVP Strategy and Planning at Southwest, to better understand why this was taking so friggin’ long.

But first, how about a little history? Southwest’s reservation system is known as SAAS. This system actually evolved from the old Braniff Cowboy system. Now, Braniff was an airline that had style but absolutely no network planning abilities. After some insane route expansion after deregulation and a whole host of other issues, Braniff collapsed in May 1982. I was four years old at the time. When Braniff died, Southwest ended up carrying the torch on a version of that reservation system, so yes, it’s old and it’s not built to handle an airline in today’s industry.

Bob explained that while it’s problematic today, for the longest time it was perfect for Southwest. Southwest was a simple airline and as the major user of the SAAS system, it could make any changes it wanted as long as it wanted to invest the time and effort. It was effectively a customized reservation system, one that Braniff agents probably wouldn’t recognize today. But as Southwest became more complicated, so did the reservation system. As Bob explained:

As we started to evolve our business model, we really put our first big strategic plan together in ’06. We looked at, well, we need to think about our boarding, think about new products, think about codeshares, think about international, think about having the ability to do complicated fare rules, stays, and all that. . . . You have to sit back and re-evaulate.

And so Southwest did re-evaluate, but it kept coming to the decision to continue modifying this patchwork of a reservation system to make it do what it wanted to do. Despite the fact that there was a mounting problem with being able to handle everything, Southwest stayed the course. But it did have a project together to try to figure out what to do in the future. That project just kept getting delayed.

The other thing that’s happened in the last 3 years specifically, the project has been re-prioritized. Fuel prices spiked, the economy went into the toilet, and so in light of those facts, we interrupted a lot of things and said, we need to pursue reservations but we need to stop and build some things that will add revenue production now, like Business Select, like EarlyBird check-in, and a bunch of revenue management things under the covers that are being pursued that are generating a lot of money.

So the reservation system problem continued to fester. They continued to modify SAAS to be able to handle more of these revenue projects, but the system just couldn’t handle everything. Yet the project to really address this issue kept being pushed back until this year. Though I thought there was a decision to get a new system long ago, Bob says that’s not the case.

The question became whether to continue to build on SAAS versus whether it would be available on Sabre, on Amadeus. That discussion started early this year and we came to a decision early summer that the right thing to do was move instead of continuing to build. Then it became, move where?

Having finally made the inevitable decision to move to a new system, now Southwest had to pick which one. And that still hasn’t happened. After the AirTran acquisition was announced, Southwest said it had narrowed the finalists to two vendors, and I can’t imagine AirTran’s vendor is one of those. AirTran uses Navitaire’s New Skies system. That system has more capabilities than the previous Open Skies system, but it is still limited. That’s why we’ve seen airlines like JetBlue leave Navitaire for others, Sabre in JetBlue’s case. They need more complexity, and Southwest needs that now too.

But what’s the timing now? It’s going to be a long time. Now that Southwest has to integrate AirTran, this might delay the new system even longer so that they can work to integrate AirTran first. And then there’s the problem of AirTran’s existing international business. How will they handle that in the meantime?

We’re working on that. We’ve got timing options. International works on Navitaire and we could pursue an option that basically continues to use Navitaire for international but connects SAAS to that, or we could pursue an option where we move the international business first to the new platform.

In other words, it could be a mess for awhile. But once the decision on the vendor is made, hopefully soon, and the project is ready to commence, we still have a long way to go.

It’s probably an 18 to 24 month project once you start, probably 24 month range. We’ve got probably up to a year’s worth of work to complete our requirements gathering and planning before we begin to execute so it’s in the 36 month timeframe.

What we now see at Southwest is an airline that will continue to be hamstrung by its reservation system for years to come. Had it made the decision to switch earlier or kept the project at a high priority, then I’m sure this would be much further along, but now Southwest has to live with electronic handcuffs for a lot longer. And that can’t be good for the business, but, well, they set the priority so they apparently feel comfortable with this timeframe.

Photo via Flickr user ajmexico/CC 2.0[]

On November 10, 2008, Southwest and a little known Mexican airline named Volaris announced that they would be joining up “to build a codeshare partnership.” It was said that details would be announced in early 2010. Well here we are in late 2010, two years after the first announcement, and the two airlines finally gave us details at Southwest’s Media Day last week. But it’s not a codeshare. It’s, uh, sort of a hybrid that’s the best the airlines can do right now.

In the last couple years, Volaris has grown up rapidly. The low cost carrier, based near Mexico City, is now the second largest airline in Mexico with 20 percent of the market in the country. It has been profitable and has some of the most impressive guarantees you’ll ever see. If your flight is more than 30 minutes late, you get a refund. Same thing if the airline loses your bag.

I’ve written about Volaris before and met with Holger Blankenstein, the Chief Commercial Officer awhile back. He was in Dallas this week along with CEO Enrique Beltranena (along with a very nice bottle of tequila for Southwest CEO Gary Kelly) to announce the first step in this partnership with Southwest. So what is this thing? It’s being called International Connect.

Starting on November 12, you can go to Southwest.com and book a flight to Mexico begining December 1 from a handful of West Coast cities.

That will slowly expand to add more cities over time, but the focus is west of Denver right now because Volaris’s US destinations (and the partnership’s connecting points) are Oakland, San Jose, and Los Angeles. In Mexico, the initial cities are Toluca (near Mexico City), Cancun, Guadalajara, Zacatecas, and Morelia with more to come later.

What you’ll see on Southwest.com will look like a regular fare display and you’ll think you’re buying a single ticket connecting on the two airlines but you’re not. What’s actually happening is that it is just combining the Southwest fare with the Volaris fare and showing it as one. When you buy a ticket, you’re actually buying two separate tickets between the two airlines. You will get a Southwest confirmation number and a Volaris confirmation number and you’ll need to check in separately for each.

So what’s the benefit? Well Southwest will now be able to check your bag all the way through to Mexico and Volaris can do the same on the return (though you have to collect your bag to go through customs and immigration anyway coming back north). Since each airline knows that you’ll be traveling on the other, the airlines can take care of you if there’s a delay. I spoke with Robby Byam, the Director of Parternships and he said that if a customer is late coming in on Volaris, Southwest will rebook that person on the next available flight and will send confirmation via email or text and meet the airplane with info. That is a big benefit. Then again, if a Volaris customer is late, they’ll be pretty happy that the flight ended up being free for them.

The Southwest guys kept floating the mantra that this is a simpler way to do things and has advantages over codeshare. The one example?

It’s more transparent – you know what airline you’re flying and not trying to figure out who is operating your codeshare flight. While I agree with that, there are a lot of other drawbacks here.

To me, this seems simple for the airline for sure, but it’s more complex for the customer. I agree about transparency and that would be just fine with me if they didn’t do a full codeshare, but I would want to see a single ticket where I only had to check in once. Whether I’m on Volaris flight 123 or Southwest flgiht 9123 (operated by Volaris), that’s not a concerne and in fact, the former might be better anyway.

But because of the limitations of Southwest’s ancient reservation system, this is the closest the airlines can come right now. So we’ll just have to take what we can get. It opens up the ability for Southwest to get its customers to Mexico more easily and in a few months, Volaris will be able to do the same for its customers via its website. That’s good.

At the end of the year, Southwest and Volaris will evaluate the partnership and decide how to expand further. Volaris will certainly be looking to see which cities send the most traffic down and that can help the airline pick its next destinations in the US. Once Volaris has gateways open in other parts of the country, it makes options with Southwest easier for people east of the Rockies.

So, is this everything I would have wanted to see here? No, but I’m just glad to see something finally happening. Being hamstrung with Southwest’s reservation system means you have to start with less than what’s ideal. I just wish Southwest could get things moving on the technology front more quickly.