Spirit CEO Vows to Get Flights on Time, Shed Laggard Airline Tagby
Discount carrier aims for the industry average by this fall
Fornaro sees growth away from rivals’ hubs in Chicago, Dallas
Many passengers on Spirit Airlines Inc. have had it with the discount carrier’s flight delays and late arrivals. Chief Executive Officer Robert Fornaro is trying to do something about their frustration.
The CEO vows to get customers to their destinations on schedule about 80 percent of the time by this fall, which would match the industry average. Last year, only 69 percent of the carrier’s flights arrived on time, the lowest rate of 13 carriers tracked by the U.S. Department of Transportation.
Improving Spirit’s performance will boost the airline’s rapport with customers, said Fornaro, who took over as CEO in January. He’s also trying to soften the carrier’s image for poor service by boosting communications with passengers and providing extra training for employees. The airline’s website is getting an overhaul, too.
“We’re No. 1 with price, and that creates a lot of benefits,” Fornaro said Monday in an interview at Bloomberg’s New York headquarters. “But it doesn’t mean you can’t be good with service.”
While Spirit may never be a leader in punctuality, Fornaro says attaining the industry average probably won’t increase expenses too much. Cutting cancellations will reduce the high cost of sometimes booking passengers on competing airlines at higher fares, he said.
Last year, the Miramar, Florida-based carrier was on time just 69 percent of the time, according to the Department of Transportation. Fornaro is targeting a gain of 5 percentage points in the on-time rate this summer, followed by another increase of 5 percentage points in the fall.
“What we’re trying to do this summer and into the fall is create some stability,” he said.
Fornaro, 63, took over at Spirit after the sudden departure of his predecessor, Ben Baldanza. Fornaro previously ran budget carrier AirTran Airways until 2011, the year it was acquired by Southwest Airlines Co.
Under Baldanza, the carrier’s emphasis on fast growth and its willingness to charge customers for soft drinks and carry-on bags often came at the expense of customer service. Fornaro is encouraging flight attendants to be friendlier -- and to explain to passengers how paying for a cup of soda keeps fares low.
Spirit’s unit revenue, a benchmark measure in the airline industry, fell 14 percent in the first quarter. That exceeded the declines at larger rivals.
Rising oil prices may help alleviate that slide since cheap fuel allowed major airlines to increase seating capacity and offer deeper discounts, challenging Spirit on low fares, Fornaro said.
Some of that stepped-up competition should lessen this year, as higher fuel prices force larger airlines to cut back on some fare discounts, Fornaro said. The carrier also will try to counter competition by expanding more rapidly in smaller markets and away from major airline hubs in Chicago and Dallas.
“We don’t need to be in the most important markets of our competitors on every decision we make,” Fornaro said.
Well known for flying a single fleet type, the Airbus Group SE A320, Spirit is studying Bombardier Inc.’s C Series family of jets, the CEO said. Adding a second aircraft type to the fleet would generate extra costs and Spirit hasn’t committed to it, he said.