Spirit is an airline looking for a network identity. It used to be that Spirit was the ultra low cost carrier (ULCC) with frequent service in large markets. It was the ultimate spill carrier. But times have changed, and Spirit has been looking for a new way to get an edge. It is now looking to a very unlikely partner… Essential Air Service (EAS)-provider Contour.
We have seen Spirit’s markets squeezed, not only via competition from other ULCCs like Frontier but also from the big network carriers. On top of that, domestic leisure travel weakness has been a problem, hitting off-peak days hard and making it tougher for Spirit to find good outlets for its very expensive fleet.
Now, with a new CEO coming from Sun Country, it has turned to a modified trick of that airline. It is looking toward those tiny EAS markets.
For Sun Country, this was not a big experiment. The airline won the EAS contract to serve Eau Claire in Wisconsin a few years back. It started with 4x weekly to Minneapolis/St Paul along with 2x weekly to Fort Myers. Over time, the frequencies shifted a bit and seasonality meant Fort Myers was replaced by Orlando and Las Vegas at different times, but it kept going until December 2024 when it lost the contract to SkyWest which offered 2x daily on peak days to Chicago, providing better frequency and connectivity.
What was most interesting about this, however, is that the Fort Myers flight actually continued through the winter, just wrapping up its seasonal run in April. I’m not sure if it will come back next year, but it seems like Sun Country may have found a little gold in that clear water up there.
The problem, of course, is that the traditional higher-frequency EAS model isn’t a great fit for a ULCC with big airplanes. So, Spirit has decided that a partnership might be the way to go to tap into this opportunity.
Contour is a Part 135/380 regional operator that is partially owned by Skywest. It has been growing its fleet of 30-seat regional jets, and it now serves a surprising number of cities. It looks like Spirit wants to build on Contour’s presence and start some leisure flying of its own.
Here is the Contour’s eastern network. (The western network exists and could also connect to leisure destinations, but it’s more likely this will start in the east.) I’ve also included some possible routes that Spirit might want to consider.
Contour in red, Spirit possibilities in yellow. Map generated by the Great Circle Mapper – copyright © Karl L. Swartz.
The agreement between the two is described as a “strategic partnership.” Contour will provide ground handling at the small cities for Spirit, and it will put forth a marketing effort to help Spirit gain traction on service to “major leisure destinations.”
I can’t imagine that Contour will be giving any of its EAS bounty to Spirit, but it can still offer those ground handling and marketing services at a very low marginal cost. Spirit will benefit.
Most of these are cities with very limited service today connecting to legacy hubs. Sure, travelers can always connect through those hubs to get to big leisure spots like Spirit’s home base in Fort Lauderdale. But a nonstop flight with a low fare? That’s what made Allegiant such a winner in the first place.
These are even smaller markets than the ones Allegiant serves, however, so it is far from a sure thing that this will work. We won’t even know which markets get served until sometime this summer, and then we’ll see how it turns out. One thing I will bet is that we see these flights operate on off-peak days.
As we know, off-peak demand is way down. But if you live in one of these small towns, would you not shift your travel to go on a Tuesday or Saturday if you could have a much easier and cheaper trip? I have to think that’s the play here. After all, Spirit doesn’t have nearly as much trouble filling planes on peak days. But if it can find a way to utilize those planes on off-peak? That’s a pretty low marginal cost if the alternative is to sit the airplane.
This would be huge news for these small towns that dot the country, but this is unlikely to really do much for Spirit. This is an airline just reaching out in every direction to find flying that might help the airline’s financial situation.
16 comments on “Spirit Partners with Contour to Find New Markets”
Slightly off-topic, and I hate to be that guy, but…
I’m surprised to see MBL qualify for EAS, and while I sympathize with those who live in the area and travel to the area. I’m not sure that the $6.8 million subsidy for MBL each year is the best use of taxpayer money (source: https://www.transportation.gov/sites/dot.gov/files/2024-09/Subsidized%20EAS%20report%20for%2048%20states_HI_PR_Oct2024.pdf ).
Don’t get me wrong, I try to travel to Northern Michigan annually, and it is usually an expensive pain to get to if you’re flying in from out of state, as many rural lake/mountain/seasonal tourism areas tend to be. However, MBL is less than a 75 minute drive from TVC (Traverse City, one of the most populated areas in Northern Michigan, and the 3rd busiest commercial airport in the state, after DTW & GRR). MBL is also only a little over 2 hours’ drive from GRR (Grand Rapids), the 2nd busiest airport in the state. Compared to most of other airports in Michigan with EAS service (with the exception of Muskegon), especially those in the UP, MBL just isn’t that far from alternative, non-EAS options.
EAS eligibility only looks at distance to the nearest medium hub airport or larger. For MBL this means DTW. GRR is a small hub and TVC is a non-hub.
If DOT would consider distance to nearest commercial service airport, many current EAS airports would not qualify. For example, ESC and IMT are both very close to MQT and could improve MQT’s viability if they weren’t individually subsidized. However, this is not how the program currently works.
Thanks for the explanation. I may not agree with the government’s logic on EAS eligibility, but it does make sense in its own way, I suppose.
Macon is a shorter drive time to ATL than many places in the Atlanta metro area :/
This seems like it would depend on there being demand from these places to go specifically to Fort Lauderdale, or at least location-agnostic demand to go to a warm beach somewhere. I’m skeptical that there enough latent demand to fill planes. Maybe I’m underestimating Fort Lauderdale’s pull as a leisure destination, though.
The bull case is that the current Contour service is very expensive for connecting itineraries. For example, to fly from SHD, you’ll have to pay $64 each way to Contour to get to CLT, and then also pay whatever fare AA charges for your flights from CLT. Round-trip fares to MIA are consistently $450/person. This is plausibly high enough to price out most leisure demand.
The bear case is that Allegiant has presumably done thorough analysis on every single one of these routes, and is already flying the ones that they think have sufficient demand. Out of the stations in the map above, Allegiant already has nonstops to Florida from CKB and PBG.
Maybe Spirit gets 1 or 2 viable new routes out of this, but I don’t see it as a big deal. They have been flying sub-daily routes out of tiny airports like LBE forever. Sharing the cost of ground handling with another airline is nice but not essential.
Yeah, unless Spirit thinks they’re going to get anyone wanting to connect to Latin America at FLL out of this it seems to be throwing their metaphorical nets into water Allegiant has already explored. But the Contour deal at least lets them do it on the cheap.
To lovingly steal from Richard Hammond’s bit about the Porsche 911: it’s like they want to build something like Allegiant. But we already have an airline like Allegiant. It’s called “Allegiant”.
Your comments on Allegiant are on-target – if it is doing its job, Allegiant has already run its slide-rule over such markets. Further, Allegiant is a specialist on this kind of stuff – it knows how to go into such markets efficiently, whereas Spirit would have to learn how.
Further, intuitively, the demand for FLL tends to be highest on the east coast – the further west you go, the more people prefer the west of Florida: Tampa or Ft Myers. Some of these places look more like west Florida markets (if they’re viable at all).
PGB is historically a good FLL market in part because of Quebecois coming over the border. Whether such people keep coming given recent events remains to be seen.
I think PGB and BTV will see passenger numbers from Canada drop, but it could be less than some people are expecting right now. There will be some demand for warm-weather travel in the winter. The “snowbirds” that own homes in Florida will still come down for the winter, and more of them fly to Florida than you might expect.
Unless Canada reduces its onerous (compared to the US, at least) airfare taxes there will always be some demand from people in southern Quebec for cheaper flights than offered at Montreal. I’m still anticipating additional services to overfly the US for the winter 2025-26 season, but given what a small player Westjet is at Dorval* unless Porter steps in there won’t be any more new routes. (The new airport at Longueuil/Saint-Hubert is still projected to open in 2025 according to their website, but I’m not sure it will have CBSA initially.)
* – yep, still refusing to call it “Trudeau”
New President of Contour Ben Munson (and co-founder of Landline) used to work for Spirit VP Network Planning John Kirby at AirTran once upon a time.
I think building on what AirTran did with some secondary/tertiary markets to Florida with day-of-week flying and combining that with the regular hub flying for daily travel has some merits. It also greatly reduces station costs for Spirit.
This is a great way for Contour to help airports that aren’t quite at 10k enplanements a year cross that goal post, which then qualifies the airport for $1 million/year in FAA safety grants and whatnot. I recall that Casino Express, back in the 90s, used to run junkets to Reno / Vegas / Laughlin from a lot of these airports in junky 737-200s – but they’d be full. I can see Spirit coming in and offering 10 – 16 week programs to places like Vegas, Florida, etc and make some money without sticking to the markets year round.
Pure speculation. I would wonder if there is a plan tied to the supposed united-JetBlue tie up. I can see spirit de hub fll to just a spoke to several smaller markets, sell the fll assets to JetBlue which in turn makes fll to a bigger Florida hub as JetBlue signs a deal with united which really wants a south Florida network. Fll isn’t a money maker for an airline for spirit with heavy competition while burning through lots of money.
Nothing wrong with experimentation, but the amount of traffic on such routes is trivial relative to total Spirit traffic. On the one hand, every little bit helps, on the other, this is not going to move the needle relative to what Spirit needs.
Spirit, Frontier and Sun Country each have spill models (Sun Country is obviously a bit different in that its spill model focuses on one main market, Minneapolis, whereas Spirit and Frontier are nationwide).
Spill models are inherently risky, because it means you don’t control markets.
But Spirit and Frontier made money for many years with their spill model. Doesn’t that prove the virtue of the model?
No, the virtue of a model is about what happens when it’s under pressure (think about Southwest Airlines in 1990/1991, which made a profit when the rest of the industry was going to hell in a handbag). During those profitable years, the dominant airlines (generally the Big Three) allowed Spirit and Frontier to have sufficient spill that they made money. Spirit and Frontier provided pretty much nothing more than price – their reliability was generally terrible, their creature comforts were minimal, but people who needed a cheap flight flew them anyway because it was one of the few low-fare options.
But then came Covid, in the wake of which, the big airlines decided they wanted those passengers. So they soaked up more of the demand, and Spirit and Frontier fell out of bed because spill was reduced. They had other issues too – with some aircraft being out of service due to engine problems. But fundamentally, the Big Three always had the ability to turn off the tap – fundamentally, the Spirit and Frontier business models had always depended on the kindness of strangers. Which is why those models were always terrible, notwithstanding the profits those airlines made for some years. You can have a bad business model and make money if conditions are right.
Compare to Allegiant, which does control most of its markets.
The crazy thing is the response, so far, by Frontier and Spirit – trying to improve reliability, changing the pricing structure, adding some better seats. There’s nothing wrong with those things, as such. Frontier’s attempt to improve reliability is quite important, and it’s somewhat odd that it hasn’t yielded better results so far (reliability still seems quite poor despite restructuring their network).
However, both Spirit and Frontier completely fail to address the underlying weakness of these models, which is that they are spill carriers. Maybe they’ll end up as better spill carriers, but they’re still spill carriers. It’s like they’re trying to fix everything except what’s really wrong.
And maybe Contour will give Spirit a few customers that aren’t as exposed to competition, but the emphasis here is “few”. Spirit’s model needs more comprehensive reform if its to gain a strategic core less exposed to competition.
Successful implementation of basic economy killed the spill model. It’s why Spirit and Frontier are floundering and it’s why they will continue to do so until they run out of money unless they come up with another strategy.
If there weren’t enough reasons to eliminate many lower 48 cities from EAS (Not all…), bringing in unsubsidized commercial service on an airbus, not even a regional, should be enough to show that many of these airports don’t need taxpayer money to avoid a 1hr drive to the airport.
Some markets like CKB already have robust ULCC service that carries more passengers than Contour yet the federal taxpayer still gives a couple million dollars to these small airports to maintain “commercial service”.
I really hope whatever EAS city gets NK service is closely monitored by Congress for future EAS subsidy. It seems to prove the point that EAS is not necessary when a commercial carrier can provide service.
CKB doesn’t get EAS money to maintain “commercial service”, but to tie it to the country’s main national networks. Other than the Contour service to Charlotte, it only has service on Allegiant, an airline with less-than-daily service and no connections. The nearest major airport is PIT, almost two hours away.
Now the question of whether or not it should be the federal government’s responsibility to connect people who choose to live in small places with no airline service is a fair one. And there’s always the question of where the cutoff should be – an hour, two hours, etc? (I find the idea that there’s EAS subsidy for Merced, CA to have service to Las Vegas when FAT is only an hour’s drive away absolutely ridiculous.)
But if there is going to be an EAS program at all, I can understand a city that only has Allegiant service qualifying for connection to a major airport.
So to boil it down, is this creative experimentation or last gasp desperation?
As far as EAS in these situations, I see zero relevance of a once or twice a week ULCC operation vs daily scheduled major connection carrier connecting to a world wide network.