Spurred by its early 2016 management change, Spirit Airlines, long an industry whipping boy for its subpar operational performance, has been improving.

In the first quarter of this year, for example, Spirit recorded an on-time rate of 76.3%. That still makes it 10th among the 12 airlines ranked by the DOT's Air Travel Consumer Report, but it's a big improvement over the carrier's 67.3% rate a year earlier.

Spirit has seen even bigger improvements in its baggage handling. In fact, the carrier's mishandled bag rate in April was 1.46 per 1,000 passengers, third-best out of the 12 airlines tracked. That marked an improvement from a mishandled bag rate of 2.11 per 1,000 passengers in April 2016. For all of 2015, Spirit mishandled 2.57 bags per 1,000 passengers.

Driving such performance improvements is Bob Fornaro, who was the CEO of AirTran from 2007 until that airline's merger with Southwest in 2011. He took the helm of Spirit in January 2016.

The hiring of Fornaro followed the sudden departure of Ben Baldanza, the CEO who had transformed Spirit into the first ultra-low-cost-carrier (ULCC) in the U.S., employing a business model of low base fares and upcharges for everything from water to boarding passes printed at the airport to carry-on bags. 

Spirit Airlines, not as bad as it used to be

But Baldanza was sometimes brazen about Spirit's lack of customer service, even going so far as to make light of consumers' complaints in advertising campaigns. 

In an interview earlier this month, Fornaro said that by the time he came on the scene, Spirit had grown too big to rely on low prices alone.

"This is a consumer-centric business, or needs to be over time," he said. "There are broad expectations that we needed to meet."

Spirit's growth was one of the driving forces behind its decision to begin putting a bigger focus on operational performance. No longer a small, niche player, it now flies 104 aircraft to 60 destinations in the U.S., the Caribbean and the Americas.

But Seth Kaplan, managing partner of the newsletter Airline Weekly, said the carrier was also pushed by changes within the U.S. airline industry. 

Low fuel prices helped lower airfares in 2015 prior to Baldanza's departure, and major airlines had begun competing more robustly with Spirit for fares on competitive routes.

"Back when prevailing airfares were rather high, Spirit could be a lot cheaper than other airlines," Kaplan said. "And as long as it was a lot cheaper, people would put up with things they didn't love. Now you can fly JetBlue for $39 one-way sometimes. So with the fares having compressed to where [Spirit] can't be a lot cheaper, they can't be a lot less reliable, as well."

Fornaro agreed with that assessment and said that by the time he joined the company, Spirit faced more frequent matching fares. Since then, United and American have joined Delta in offering basic economy fares, as well.

After several months of planning and analysis, Spirit began making its operational changes last May. It reduced aircraft utilization by approximately 2%, added padding to scheduled flight block times, adjusted routing and maintenance bases and restructured schedules to add more buffer time in certain markets.

At Chicago O'Hare, for example, Spirit made a reduction in its daily flights from 31 to 29 because tight operational constraints at the crowded airport had made O'Hare the cause of a disproportionate number of Spirit's delays, Fornaro said.

The carrier also made seasonal scheduling adjustments for weather, allowing more time at airports that tend to have a lot of thunderstorms.

Driving the operational improvements, Fornaro said, has been an increased emphasis on centralized planning. Spirit has added 38 staffers to its Miramar, Fla., operations center since he came on as CEO.

"There's no amount of effort that can make up for a poor operating plan," he said.

Fornaro said that the cost of operational changes, such as less aircraft utilization, have largely been made up for in savings on irregular operations, including the cost of re-accommodating customers.

Despite Spirit's improvements, there is still much progress to be made. In April, 7.02 per 100,000 passengers complained about Spirit to the DOT. That was more than triple the industry average and more than double the complaint rate of each of the other 11 carriers included in the Air Travel Consumer Report.

Spirit Airlines, not as bad as it used to be

"They've made improvements, but they still have a long way to go," said Dean Headley, a Wichita State University professor who co-authors the annual Airline Quality Report, using DOT data.

A spate of more than 300 cancellations occurred in late April and early May, when pilots mired in collective bargaining negotiations began accepting fewer flight assignments. This led to a much-publicized May 8 Fort Lauderdale Airport brawl involving upset Spirit passengers.

The pilot action also dropped Spirit's May on-time performance to 69.1%, according to the airline.

Fornaro said he believes Spirit's reputation has improved along with its operational performance. Still, the May incident was a damaging hit.

"We have to rebound from it," he said. "When you're getting better every month, you start to build momentum. This is a setback, and you have to get back on track."

Over time, he said, Spirit aspires to increase its on-time rate.

"With our fares, and at 80% on time, we're providing a great product," Fornaro said.

Kaplan said that as an ultralow-cost carrier, Spirit ultimately might be satisfied with a middle of the pack standing in operational performance in order to balance costs with service.

"For an airline like Spirit, there is some optimal place between being the best and being the worst, and that's what they are trying to get to," he said.

Correction: An earlier version of this report incorrectly described Baldanza's departure from Spirit Airlines as a "dismissal." He resigned.


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