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Spirit’s New CEO Knows How to Pull Off Airline Mergers

Is this a sign that Spirit could be bound for a deal with ultralow-cost Frontier?
Photographer: KAREN BLEIER/AFP/Getty Images

The world’s largest airline, American, spent 2015 demonstrating that it can inflict a financial toll on its ultralow-cost rivals. American began matching the cheapest fares on competing nonstop routes and has promised to offer a new bare-bones fare in the new year to address competition from Spirit and Frontier airlines. 

The fare fight took a toll. While Spirit remains wildly profitable, the airline’s share price dropped 47 percent in 2015 amid torrid expansion. Its revenue dipped due to extremely low fares in many of its most crucial markets, such as Dallas-Fort Worth, Chicago, Fort Lauderdale, and Los Angeles. On Tuesday, meanwhile, Spirit announced that Chief Executive Ben Baldanza had been replaced by industry veteran Robert Fornaro.