Spirit Airlines CEO Will Step Down in 2019By
Chief financial officer named to take over at deep discounter
Departing boss has worked to improve on-time arrivals, service
Spirit Airlines Inc.’s chief executive officer said he’ll stay in the job one more year before handing leadership of the deep discounter to its current finance chief, the company said Wednesday.
Robert Fornaro, 64, who took over at the airline early last year following the ouster of its previous CEO, will cede the job to Chief Financial Officer Ted Christie on Jan. 1. 2019, the company said in a statement Wednesday. Ahead of the move, Christie will become president of the airline and join its board at the beginning of 2018.
“Over the past two years as CEO, Bob has led a real transformation at Spirit, driving dramatic improvements in operational reliability and in the customer experience while strengthening our executive team,” Spirit Chairman Mac Gardner said in the statement. “He has also provided nimble, experienced leadership through a volatile competitive environment.”
Fornaro was seen as a steadying influence two years ago when he took on the president and CEO roles. In 2015, Spirit shares had fallen 47 percent partly because of previous CEO Ben Baldanza’s move to expand in the Dallas-Fort Worth market. American Airlines Group Inc., which has a dominant hub there, quickly matched Spirit’s low fares, damaging the carrier’s fortunes.
While the stock did steady after Fornaro took over, Spirit took another tumble in July after Fornaro disclosed that United Continental Holdings Inc. had been matching its fares in certain hubs. Shares fell 18 percent on July 27 in the biggest drop since May 2011.
On Wednesday, the company rose less than 1 percent to $43.65 at 10:33 a.m. in New York. The shares are down about 25 percent this year compared with a 6.4 percent climb in a Standard and Poor’s Index of five leading U.S. airlines.
Fornaro’s priorities in the past two years have included improving Spirit’s abysmal on-time arrival record and its widely-criticized customer service. The airline’s reliability has been improving, ranking third among 12 U.S. carriers in on-time arrivals for the month of October, according to a monthly government survey. The carrier still ranks 10th overall for the 12 months ended October.
Some analysts have been expecting Fornaro to merge the Miramar, Florida-based carrier with another ultra-low-cost carrier: Frontier Airlines Holdings of Denver. That’s partly because Fornaro had led AirTran Airways in that company’s 2011 sale to Southwest Airlines Co., Cowen and Co. analyst Helane Becker said as Fornaro took office. No merger has yet taken place.
Christie, 47, joined Spirit in 2012 as senior vice president and chief financial officer and in 2017 took on additional marketing and pricing duties as executive vice president. Previously, he held management roles at Pinnacle Airlines and at Frontier.
“With our improved operations, balanced growth and stable costs, I’m confident we will strengthen our position as the leading ultra low-cost carrier in the Americas,” Christie said in the Wednesday release.