It’s the airline that had unabashedly advertised its product as a “cheap seat for a cheap ass.”
But now, amid increased competition from larger, more mature airlines, Spirit Airlines is ready to shake off its bad-boy streak and grow up a little.
Spirit, based in Miramar, has been known for its cheap flights and no-frills passenger experience, as well as its unconventional, and often sexually provocative, marketing campaigns over the last few years.
That was all part of the no-apologies, no-excuses attitude of the previous chief executive, Ben Baldanza whom Spirit’s board replaced in January. High numbers of customer complaints, Baldanza liked to say, come with the cheap-fare territory. It was an approach modeled on the Irish budget airline, Ryanair, which became one of Europe’s largest airlines — but perhaps most reviled — by taking a cattle-car approach to regional air travel.
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You get what you pay for, was the Spirit spirit. And for everything else, you pay extra. The airline led the way in charging travelers extra fees to check a bag or even carry on a bag, or to do much of anything besides sitting in the cramped cheap seats. Spirit has also become a pacesetter in other traveler-unfriendly categories, routinely achieving the industry’s highest rate of consumer complaints and worst on-time performance.
But the new chief executive, Robert Fornaro, six months into his job, says he is ready to put a new face on Spirit and a new emphasis on customer service. The makeover also includes toning down the frat-boy image, cleaning up the cabins and maybe even getting more of the planes to arrive on time.
Last week Fornaro was in New York trying to sell his strategy to investors, analysts and reporters.
“There is a big change in terms of focusing on our operations,” Fornaro said in an interview. “This is how we want to be viewed: on time, friendly, clean and efficient.”
The question is whether Fornaro, a longtime industry executive, can improve the airline’s operations and reputation while maintaining the ultralow fares.
Spirit is still small but has grown quickly since adopting its low-cost approach 10 years ago, increasing its number of passengers by 27 percent last year alone, to 16 million, although it still ranks far behind the market leaders in the United States.
The growth came despite the array of extra fees beyond the basic ticket price.
Need a boarding pass? You’d better print it at home, otherwise there’s a $2 charge to pick it up at an airport kiosk, or $10 if an agent prints it for you.
Need to store a carry-on in the overhead compartment? That'll be $35 upfront when you book your flight, or $100 if you wait until you’re lined up at the gate.
When the beverage cart rolls down the aisle, a can of soda will set you back $3.
Spirit flies from all but three of the 25 largest metropolitan areas in the United States — Sacramento, Charlotte and St. Louis — and plans to announce service in additional, still undisclosed, midsize markets later this year. It also flies to locations in the Caribbean and Central America, including the Dominican Republic, the U.S. Virgin Islands, Costa Rica and Nicaragua.
Only about 2 percent of domestic passengers flew on Spirit planes last year — compared with 17 percent on Delta, 13 percent on American Airlines and 10 percent on United, according to the Transportation Department. But it costs the larger carriers at least 14 cents to fly each passenger one mile, while Spirit’s costs are only half that passenger-mile rate.
No wonder those three big legacy carriers have taken note and are responding with no-frills products of their own. Delta has already introduced what it calls “basic economy” fares. The tickets cannot be changed or refunded after a 24-hour period and do not include advance seat assignments. Both United and American Airlines have said they plan to introduce similar entry-level fares later this year.
“That basic economy fare can be competitive with the ultra low-cost guys,” said Helane Becker, an airline analyst at Cowen and Co. “As a leisure customer, if I can fly Delta for the same price as Spirit, and Delta has the better on-time ratings, why wouldn’t I fly Delta?”
Fornaro, who led the budget carrier AirTran Airlines until its merger with Southwest Airlines in 2010, argues that he can improve on-time and complaint ratings without incurring higher costs.
By paying to improve operations, he said, the airline would cut down on expenses in other areas, like fees it incurs when it has to reimburse passengers for canceled flights. It would also cut down on overtime needed to pay staff who work longer hours amid delays.
“If we run a better operation, we'll have lower recovery costs,” Fornaro said.
Fornaro also said the key to decreasing customer complaints would be to reduce surprises for first-time Spirit fliers.
About two-thirds of Spirit’s passengers book their tickets directly through the company’s website, so they tend to already be aware of the various extra fees, he said. It’s the other one-third of customers, who book their flights through third-party sites, who are often surprised when they arrive at the airport to find that they'll be charged for extras.
Spirit has started sending emails to some of its third-party customers to explain the fee structure and offer 24 hours to cancel. That kind of outreach could become even more important as the company expands to more markets this year.
“They have a big problem: Many people try Spirit because they’re attracted to the low fare, but then they don’t come back,” said Julie Yates, an airline analyst at Credit Suisse. “Bob is softening the overall approach to be more friendly. Over time, that should help them retain more customers.”
Until then, let the flier beware.