Spirit Air­lines re­places CEO

Stock sank as big­ger ri­vals pre­vailed.

The Denver Post - - BUSINESS - By Michael Sasso

new york» Spirit Air­lines Inc. re­placed CEO Ben Bal­danza af­ter a year in which the low-fare car­rier’s stock sank un­der pres­sure from big­ger ri­vals. Robert Fornaro was named pres­i­dent and CEO, ef­fec­tive im­me­di­ately, the Mi­ra­mar, Fla.-based air­line said Bal­danza Tues­day.

Fornaro, 62, has been a Spirit di­rec­tor since May 2014 and was AirTran’s pres­i­dent and CEO for more than three years un­til May 2011. He also has been an ex­ec­u­tive at US Air­ways and North­west Air­lines.

In­vestors had soured on Bal­danza as the car­rier con­tin­ued to miss an­a­lysts’ fi­nan­cial es­ti­mates and its stock fell be­hind the in­dus­try, said Adam Hackel, an as­so­ciate an­a­lyst at Sterne Agee CRT. Spirit fell 47 per­cent last year, com­pared with a 4.6 per­cent de­cline for the Bloomberg U.S. Air­lines In­dex.

“I think that with the stock down the way it was, un­der­per­form­ing the group, peo­ple get fed up,” he said.

Shares climbed 6.8 per­cent to $41.86 at 11:23 a.m. in New York. The stock ad­vanced as much as 7.5 per­cent, the most in­tra­day since Jan. 22, 2015.

A po­ten­tial merger of Spirit and an­other ul­tra-low­cost car­rier, Den­ver-based Fron­tier Air­lines, is more likely un­der Fornaro than un­der Bal­danza, al­though not in the near term, Sa­van­thi Syth, an an­a­lyst at Ray­mond James Fi­nan­cial, said.

Fron­tier is owned by pri­vate-eq­uity firm Indigo Part­ners, which for­merly owned Spirit.

Spec­u­la­tion about a merger with Fron­tier has cir­cu­lated for at least 18 months, and Bal­danza has re­jected the idea, said Spirit spokesman Paul Berry.

“Many times he has said there are no plans to merge with Fron­tier and that our growth was go­ing to be or­gan­i­cally, in­stead of ac­quir­ing an­other air­line,” Berry said.

Spirit has ex­panded rapidly in re­cently years as an ul­tra-low-cost car­rier, ad­ver­tis­ing “bare-bones” fares and col­lect­ing much of its rev­enue through fees for ex­tra legroom, bags, re­fresh­ments and printed board­ing passes.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.