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Spirit Airlines has eye on mid-sized markets

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Speaking Tuesday at his first earnings conference since being named Spirit CEO in early January, Bob Fornaro said the airline might focus more of its route network on mid-sized markets.

“I think going forward, we are going to be much more open to a broader view of routes,” Fornaro said, according to a transcript of the call prepared by the websiteSeeking Alpha.

The new CEO noted that over the past couple of years, Spirit has focused most of its aggressive route expansion on flights between big markets, pitting the airline against major carriers.

The strategy has differed from the approaches taken by ultra-low-cost competitors Frontier, which is expanding its route network with an eye toward mid-size markets, and Allegiant, which often connects small markets with mid-size ones.

Bob Fornaro
Bob Fornaro

Fornaro said that Spirit won’t make dramatic schedule changes before the summer, but said that over time the carrier “will be just as interested in looking at mid-size markets and small markets.”

Fornaro also emphasized during the call that Spirit won’t change its central ultra-low-cost business model, but that it needs to do better with customer service, including on-time performance.

“One of the primary areas we are focused on is improving the overall customer experience and we have made this a top priority for 2016,” he said.

In 2015, Spirit consistently performed below the North American low-cost carrier average for on-time flights, according to the website Flightstats, bottoming out with an on-time performance of just 54% in June. Last month, Spirit’s flights were on-time 68% of the time, compared with an average of 80% among all North American low-cost carriers.

Fornaro said Spirit would address the problem by spreading its fleet slightly less thinly during peak periods, increasing its ration of spare planes and by increasing crew management staffing levels. He also said Spirit will be examining operations to make sure it schedules the proper amount of time for flight blocks.

Spirit reported net income of $317.2 million in 2015, up 40.7% from 2014. Earnings per share in the fourth quarter were $1.03, beating analysts’ expectations by 3 cents.


[Source:- travelweekly]
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