Spirit's new CEO: Fees stay, but service must improve

Spirit Airlines has been one of the USA’s fastest-growing airlines during the past few years. But it’s also become one of the most-complained about.

Now, however, it appears the Florida-based “ultra low-cost carrier” is ready to adjust its course.

That’s according to CEO Bob Fornaro, who unexpectedly took over at the carrier just last month and replaced previous CEO Ben Baldanza.

Spirit has drawn the ire of many customers not only for its long list of fees, but also for recent operational struggles.  Delayed and canceled flights and mishandled bags have been particularly challenging.

Spirit solicited fliers' hateful comments; What did it hear?

Spirit's billion-mile giveaway encourages fliers to hate it

Fornaro said there are no plans to change Spirit’s fee-heavy business model, but he did say it's time to “focus on continuing to improve operational reliability and customer service.”

“That is part of our business structure,” Fornaro said about the carrier’s strategy of rock-bottom fares with add-on fees. “The kind of complaints we want to remove is when we lose the bag we don't recover. Or when we have a four-hour delay and we don't get the customer where they need to go.”

"Reputation does matter," Fornaro added, according to Reuters.

The comments came during Spirit’s fourth-quarter earnings call, which was Fornaro’s first since assuming the CEO role at Spirit. The call drew particular interest from industry observers who were eager to see if Fornaro would signal a new direction for Spirit.

Fornaro, of course, help now-defunct AirTran grow into one of the USA’s most-formidable low-cost carriers until it was acquired by rival Southwest in 2010. The AirTran brand disappeared at the end of 2014 when Southwest finished folding the last of AirTran’s operations into its own.

Spirit responds to 'most-complained about' label

So long, Citrus: AirTran Airways makes its final flight

Beyond Spirit's customer service, Fornaro also indicated a change in the airline's route strategy by suggesting that the fast-growing carrier will focus more on small and mid-sized markets.

Spirit has expanded rapidly during the past few years at airports like Atlanta, Dallas/Fort Worth, Houston Bush Intercontinental and Philadelphia -- markets where the airline has been able to come in and dramatically undercut base fares offered by dominant carriers American, Delta and United.

But American, Delta and United have since begun to push back against incursions from Spirit and other ultra low-cost carriers. All have unveiled plans for special discount fares that compete with carriers like Spirit on price but are even more restrictive than normal fares and come without “perks” like seat assignments. And American in particular has responded with aggressive pricing on routes where it goes head-to-head with Spirit.

AA to offer fares with 'less frills' to battle low-cost carriers like Spirit

Growing Spirit Airlines now at 17 nonstop routes from Atlanta

Fornaro acknowledged that the stepped up competition at rivals' hubs has sparked fare wars that have pushed down prices.

The Sun-Sentinel of Fort Lauderdale notes “Spirit’s revenue from the average ticket decreased 21% to $57.52 compared to the previous year, due in part to lower fares offered amid increased competition.” However, its revenue from fees remained relatively stable.

Against that backdrop, Fornaro said Spirit will keep flying from the hubs of its major rivals. But he added that the carrier will increasingly look elsewhere for growth.

The strategy of growing at rivals’ hub airports has "produced very good results and still produces very good results,” Fornaro is quoted as saying by TheStreet.com. “(But) going forward we will be much more open to a broader view of routes. We will be just as focused on midsize markets.”

"I think we will be less predictable going forward (with) less predictability in the way we pick routes," he added.