Spirit Airlines created quite a buzz last month when it announced it would charge fees for some carryons, drawing the ire of passenger rights groups and lawmakers. Spirit CEO and President Ben Baldanza talked with aviation editor Michael Fabey about how Spirit might have handled the situation differently as well as the philosophy and future for his "ultra-low-cost carrier."
Q: What keeps you up at night?
A: I have one thought on my mind: How can I get and keep my price down.
Q: What don't people get about the Spirit model?
A: It's the total price, stupid. People don't want to buy one-offs, they want to buy the whole trip.
Q: You've likened Spirit to Costco and its business model. Is that what you would want to be, the Costco of the airline industry?
A: I would love that. You pay one price to get in. You know what you're getting.
Q: Under your economic model, then, volume has its own economic force. That's what you're trying to do, right? Drive up the volume?
A: Right. When the pricing goes down, you get more passengers. Our goal here is to drive it down to the lowest cost possible to get as many people to fly as possible.
Q: And that remained your main concern even as you decided to charge fees for the carryons?
A: Absolutely. Our main concern was, how do we do that without increasing the overall costs for our customers. We lowered the base fare. We lowered the checked-bag fee.
Q: But that wasn't the focus of the media coverage.
A: We put out a release saying we were lowering those fees. The mention of the $45 per bag charge was on Page 2.
Q: Since that release and the media blitz you've spent a lot of time defending or explaining your decision to Washington and the public. If you had it to do over, what would you do differently?
A: We would have gotten the debate started about the real problems: About the safety issues of the overhead bags and the delays those bags cause. Maybe we would have come out by saying we were removing the overhead bins: it would be safer, and it would save on fuel. Now that would be considered a terrible thing.
Q: Would you have started that debate in Washington, to let lawmakers know what you were doing?
A: Probably. We've been meeting [Transportation] Secretary [Ray] LaHood and others, and we've done a better job of letting people know what we're planning to do. Once the debate has moved on to the real problems of carryon bags, we found that the audience became much more balanced in their judgment of the issue.
Q: You think, then, that you're seen in a better light than other carriers charging fees?
A: We've lowered prices as we've increased fees, for a net lower cost to the consumer. It's hard for us to nickel-and-dime anyone when we only charge a nickel. Most of the rest of the industry has just tacked on fees to their already higher prices.
Q: You continue to expand internationally, especially into Latin America. Where do you hope to go to next?
A: I'd love to go to Cuba, but who knows when we'll be able to go there. We can't, and be profitable, under the current convoluted charter system they've set up. We'll fly there when we can make $29 flying to Havana.