Southwest Airlines Co. (LUV), The Boeing Company (BA): Spirit Airlines Incorporated (SAVE) Shares Soaring This Year

U.S. airline and travel industry market outlook

The U.S. Federal Aviation Administration projects an optimistic outlook for airlines in the U.S., predicting that the industry will grow almost twofold in the next 20 years based on the worldwide aviation trends. The Boeing Company (NYSE:BA), the largest airplane-manufacturer, shares that sentiment, seeing the market expanding into a $5 trillion industry by 2032.

Demand for new airplanes within the 20-year period was pegged at 35,280 units. Airplanes in service are expected to jump 103% from 20,310 planes in 2012 to 41,240 by 2032, or about 5% annually. Because of the rising demand for airplanes amid increasing air travel worldwide, The Boeing Company (NYSE:BA) shareshave also enjoyed the ride up, gaining an impressive 34% for this year.

The bottom line

Instead of competing with the big dogs in the industry, Spirit Airlines struck a gold mine by positioning itself in an untapped market that is even bigger than the segment where the majority of its competitors are positioned. While the rest are trying to attract high-paying passengers, Spirit Airlines captures more passengers who want low-cost air transport, thereby achieving higher occupancy rate.

By stripping all in-flight perks, it can not only offer low-cost fares that grab market share from its competitors, but also expand the market by attracting more passengers to opt for air travel. This principle will help sustain the company’s growth in the coming years as it continues to add more routes to cater to more passengers.

The article Spirit Airlines Shares Soaring This Year originally appeared on Fool.com and is written by Emmanuel Floriann Magto.

Emmanuel Floriann Magto has no position in any stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool owns shares of Spirit Airlines. 

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