Northwest Arkansas Democrat-Gazette
What’s next for Spirit Airlines
The two things that stand out most about Spirit Airlines are its low fares and high number of complaints.
Spirit has improved on-time performance and cut its complaint rate by more than half in the last few years, although it still ranks near the bottom among U.S. airlines.
The airline is about to get a new CEO. Ted Christie, currently the president, will take over in January, replacing Robert Fornaro.
Christie sat down with The Associated Press recently at Dallas-Fort Worth International Airport and talked about Spirit's reliance on extra fees, its reputation, and whether he will make changes once he becomes CEO.
For people who have never flown on Spirit, who are your customers?
The vast majority of people on airplanes today are in the top 10 percent of wage earners in the United States, so 90-plus percent of the United States just does not travel very often on airplanes. Products like ours have a better shot at trying to attract that type of discretionary spend.
Do Spirit and the other ultra-low-cost carriers nickel-and-dime customers with all the fees you charge?
When people buy a ticket on Spirit or any airline, they have a certain view in their mind about what the value exchange is and what they expect to get in return. They expect a clean, friendly, reliable, safe mode of transportation that met their expectations in the form of the price that they paid. It is different than an experience on a fully bundled carrier, but that product is attractive to certain people because they want to be more selective with their discretionary spending.
In the last Transportation Department report your complaint rate was down more than half from a year ago, but you and Frontier are still at the bottom. How will Spirit improve its reputation?
Changing the reputation is about consistency. There are allegories for this in history over a variety of different segmented products where maybe the lower-cost alternative took some time to prove to people that there was value. If it was Honda in the ’70s or if it was McDonald’s in the ’50s — pick your analogy. You lost money in the first quarter, and
your stock is down about one-fourth from a year ago. Can you reverse that?
Airline stocks in general are reflecting sentiment around a few concepts, which is can the industry show that it has appropriate pricing traction when you have change in input costs like fuel, labor.
Are you going to make any immediate changes when you become CEO in January?
The good news is we have a great starting point, we have a very good core product. I don’t think I come in here needing to necessarily turn the apple cart upside down. What this is about is consistent focus on execution.