Ben Baldanza Out as CEO of Spirit Airlines; Former AirTran CEO Replaces Him
“W hat Have Your Done For Me Lately” is a question asked by Janet Jackson in a hit song from the 1986 album Control, which can appropriately apply to the recent rash of firings and resignations of head coaches in the National Football League after their professional football teams experienced a disappointing season — and it also apparently applies to the chief executive officer of Spirit Airlines, who was abruptly replaced by the former chief executive officer of AirTran Airways, according to this official press release from Spirit Airlines.
“Following the tremendous growth and success of Spirit over the last 10 years, the Board and I have concluded that this is the right time to implement an orderly succession plan,” said Ben Baldanza, who recently moved his family to the Washington, D.C. area.
The Legacy and Leadership Style of Ben Baldanza
Ben Baldanza led the commercial airline industry in its push for more and more ancillary airline fees ever since he became the chief executive officer of Spirit Airlines back in 2006; and the airline was transformed from losing money to becoming one of the most profitable airlines in the United States — if not the world — as I first reported in this article on Thursday, May 9, 2013.
In fact, his implementation of what came to be known as à la carte fees occurred early enough where frequent fliers believed that it was a phenomenon which solely pervaded ultra-low-cost airlines — only to be adapted by legacy airlines as well, as the significant profits simply could not be ignored…
…but the legacy airlines did not carry the concept to the point of the now-former 54-year-old chief executive officer, whose “brash, no-excuses style” led him to ensure that the base airfare was stripped of any extras — such as fees for checked bags, snacks, most beverages, seat assignments, boarding passes, the use of the overhead bin, and the introduction of carry-on baggage fees in 2010 which soared to as much as $200.00 round-trip back in 2012.
“To cram more people into its jets,” according to this article written by Scott Mayerowitz of the Associated Press, “Baldanza stripped passengers of the ability to recline their seats. He spun the move as making the seats ‘pre-reclined.’” Baldanza even reportedly said that if people didn’t like the fees, they could fly another airline.
Irresistibly Low Airfares
For many people, the airfares offered by Spirit Airlines are irresistible. As an example, Ric Garrido of Loyalty Traveler reported in this article that he purchased during a sale a round-trip itinerary between Las Vegas to Boston for only $68.20; but the sale — which he calls the “real deal” — is only valid today, Tuesday, January 5, 2016 if you want to participate in it. “You probably need to pay for at least one checked bag at $30 each way”, he wrote. “$128 round trip fare is some kind of wonderful winter deal for LAS-BOS round trip.”
Of course, if you intend on sitting in the middle seat and bringing very little luggage — two things which Ric Garrido and countless other frequent fliers are typically loathe to do — the savings can be significant; but those passengers are in the minority…
…and Spirit Airlines counts on that in order to reap in its profits — as well as fuel its rapid growth in recent years where Spirit Airlines now operates 375 daily flights to 56 destinations in the United States, Latin America and the Caribbean.
An example of part of that aggressive growth is the increase of service at the international airport which serves the greater Atlanta metropolitan area. Initially thought that the acquisition of AirTran Airways by Southwest Airlines would give Delta Air Lines a run for its money, it is really Spirit Airlines — along with Frontier Airlines — where competitive growth has occurred in Atlanta; while the competition from Southwest Airlines at that airport seems anemic at best.
Robert Fornaro Named New Chief Executive Officer
Speaking of AirTran Airways — whose A+ Rewards frequent flier loyalty program ended on Saturday, November 1, 2014 — its former chief executive officer from November 2007 until May 2011 has become the new chief executive officer of Spirit Airlines after having served on its board of directors since May of 2014. The appointment of Robert L. Fornaro became effective immediately and is already posted at the official Internet web site of Spirit Airlines.
“I am honored by the Board’s selection and am excited to have the opportunity to lead Spirit,” said Fornaro, who will also continue to serve as a member of the board of directors at Spirit Airlines. “Spirit’s focus will remain delivering a customer-friendly product and providing the lowest total price to the places we fly. I look forward to working with the rest of Spirit’s management team and team members to grow the Company’s proven ultra low-cost model and drive value for all of Spirit’s stockholders.”
Reasons For the Departure of Baldanza
Mayerowitz reported in the aforementioned article that “In the past year, the amount of available seats has grown by 34 percent. But passenger revenues haven’t kept up, growing less than 1 percent, as other airlines also created their own structure of fees, which are no longer a novelty.”
Additionally, the price of shares of stock of Spirit Airlines Incorporated have been reduced by approximately 50 percent over the past year from its high of $83.45 — even when including the gain of approximately six percent today alone, in which the share price was $41.53 as of 3:18 in the afternoon. That gain of $2.35 is primarily based on the announcement of the change in leadership at Spirit Airlines.
This leads me back to the title of that aforementioned Janet Jackson song from almost 30 years ago. Whether or not you agree with the management style of Ben Baldanza, he did lead Spirit Airlines to significant profitability; and yet because there has been a lull in that tremendous growth — whether or not it was because of Baldanza — he is suddenly replaced in his leadership position at the airline. That simply seems somewhat short-sighted to my untrained brain. As with a football team whose head coach led it to championship seasons but had a few recent years where the team has not performed well, is it really time to implement a change in leadership? That question is debatable, as it depends on circumstances…
…but could the change in leadership lead to friendlier policies for customers? Only time will tell.
Like it or not, Baldanza was a pioneer in the advent of ancillary fees in the commercial airline industry, which is estimated to rake in $59.2 billion in revenue worldwide…
…and the subheadings in this article use the annoyingly official yellow color of Spirit Airlines.
Source: Spirit Airlines.