When Spirit Airlines was controlled by Bill Franke, they had something of a seat of your pants way to find new routes that other airlines weren’t flying. Former CEO Ben Baldanza shared that they evaluated the potential of flying Fort Lauderdale to Armenia, Colombia – a place that hadn’t ever had service from a U.S. airline – they couldn’t really look at existing air travel between the two cities.
Instead they looked at telephone data and remittance data to get a sense for ties between the U.S. and the Latin American city. They wanted to know how frequently people were calling, and how much money and how often was being sent overseas. It was enough that they guessed there was an air travel market there. El Edén International Airport only has service to Bogota, Medellín, Panama City and… Spirit’s service to Fort Lauderdale.
Brian Sumers relays a story of route selection by another Franke airline, Mexico’s Volaris, that was shared at that carrier’s investor day.
Volaris executives shared an anecdote about the Denver to Chihuahua route, which began in 2014. Before loading it, Volaris sent employees to the bus station in Denver to count the number of passengers boarding twice daily buses to Chihuahua. “That’s how we ended up offering that new route service that had never been operated before by an airline,” Blankenstein said.
Volaris sent people to a bus station to count passengers because that was the best way for them to get the data on how many people were traveling by bus between Denver and Chihuahua, Mexico. And it wasn’t just that this number of people traveled between the two cities, but Volaris actually considers itself a substitute for the bus.
However, Volaris executives argued the bus industry is still ripe for disruption. They said there are three billion bus passengers in Mexico each year, about a quarter of whom the airline believes it can pick off. If Volaris converted 10 percent of passengers in what it calls the “luxury bus passenger segment,” the Mexican air travel market would double, executives said.
When Southwest Airlines began flying between Houston, Dallas, and San Antonio the ‘Southwest effect’ was getting people out of cars and into planes with inexpensive flights. It wasn’t just that they were driving down costs on the route compared to other airlines, but attracted new passengers. Volaris does that too – just bus passengers rather than car passengers.