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