Asking passengers to pick up around their seats is just one way Spirit Airlines tries to cut costs. But it doesn’t skimp on fees.
Cheap at work doesn’t mean Baldanza is cheap at home. He admires the business model of McDonald’s Corp. but says he doesn’t eat at the fast-food mega-franchise. Baldanza prefers a sit-down restaurant with made-to-order food.
But he’s not a spendthrift. He notes that he drives a BMW 3 series, not the full-size luxury 7 series.
He doesn’t have to skimp at home. In 2012, Baldanza earned a base salary of $470,000, plus stock and other bonuses that brought his total earnings to nearly $3 million, according to federal filings. It’s a salary that surpasses the pay for CEOs of some other airlines, such as JetBlue Airways Corp., but remains below what executives at much larger airlines earn.
Spirit started as a Detroit trucking company that was converted to a charter airline in 1983, flying vacationers to Las Vegas, Atlantic City and the Bahamas.
The carrier latched on to its ultra-low-fare business model in 2006 when investors from Oak Tree Capital and the Indigo Partners suggested that Spirit follow the examples of low-cost foreign carriers like such as Ryanair Ltd. of Ireland, Tiger Airways Holdings Ltd. of Singapore and Volaris of Mexico.
After years of working in executive positions with American, Northwest, US Airways and Continental airlines, Baldanza joined Spirit in 2005 and became a true believer in the super-low-cost business model.
“Now, I’m like a reformed smoker,” he said.
The penny-pinching extends throughout Spirit headquarters, where the 400 or so employees must also vacuum around their desks and empty their own wastebaskets. A custodial crew comes into the building only once a month or so, but apparently not enough to clean the food stains splashed on the carpet around the cubicles.
The lobby of the headquarters was all but removed to make space for a conference room.
On the tarmac, Spirit planes fly an average of about 13 hours per 24-hour shift, compared with the industrywide average of 9.6 hours. In the cabins, flight attendants ask passengers to help keep fares down by cleaning around the seats before they exit.
The flaw in Spirit’s business plan has been the carrier’s widespread reputation for poor service.
Spirit made its debut this year on the annual airline rating by Consumer Reports, landing at the bottom with the lowest overall satisfaction score of any company ever rated by the magazine.
In May, the U.S. Department of Transportation received 80 complaints against Spirit for customer service and problems with baggage, refunds and reservations. Spirit had the third-highest number of complaints for the month, behind only the much larger United Airlines, with 149 complaints, and American Airlines with 136 complaints.
Social media sites are littered with angry posts about flying on Spirit.
Baldanza said he is bothered when flight delays anger passengers, but he doesn’t fret about the gripes over fees.
“When people are complaining about the structure of the business model, to me that is akin to someone walking into Chick-fil-A and screaming ‘Why don’t you sell hamburgers?’ ” he said.
And yet, Spirit continues to draw new passengers, intrigued by its low prices.
“For some people, price presumably trumps everything,” said Jan Brueckner, an economics professor at UC Irvine. Still, he added that Spirit must upgrade its services it if wants to attract high-spending business travelers.
Adam Rongo, a musician from New York, recently flew to visit family in Michigan on a Spirit flight that was delayed more than 15 hours. He said he spent an extra $18 for a seat with 6 inches of additional legroom but was moved back to a standard seat when the flight was rescheduled the next day.
Despite the long delay and the hassle of arguing with Spirit workers for his refund, he said he might consider flying Spirit again because his $325-round-trip fare was such a good deal.
“If I do, at least I know what I’m getting into,” he said.