Bob Fornaro is proud of the progress Spirit Airlines is making with its business model since he became CEO in January 2016.
The airline, operating 108 planes with around 500 flights daily, logged its best on-time performance ever at 86.5 percent in October, he says. Its flight attendants this year underwent intense customer-service training at the Disney Institute, and Fornaro is optimistic that Spirit will ink a deal with the union representing pilots.
On November 9, Spirit starts two more daily flights from Pittsburgh International Airport, to Tampa and Fort Myers, Florida, for getaways to the warmer clime through April.
“We have dramatically improved the quality of our airline, in terms of reliability and friendliness, and by far we have the best prices any airline could offer,” says Fornaro, during a visit to Pittsburgh to market the 25-year-old, low-cost air carrier and get better acquainted with airport officials. “We want to get you to your destination and you’re going to have more money when you get there. That’s philosophically where we are.”
Based in Miramar, Florida, Spirit entered the Pittsburgh market in May – the 61st city in its network – with daily flights to Dallas/Fort Worth, Myrtle Beach, Fort Lauderdale, Houston, Las Vegas, Los Angeles and Orlando. The discount airline also flies out of Latrobe’s Arnold Palmer Regional Airport.
“We’re happy where we are right now. It’s going as we expected,” Fornaro says of the Pittsburgh market, where Southwest Airlines is Spirit’s biggest competitor for predominantly leisure travelers. “We set different criteria for new markets. Over time our goal is to be in the 80 percent load factor, the percentage of seats we want to fill over time. We have targets to get there and we think we’re on track. I’m here to get a closer look, to interact with the community personally.”
Fornaro acknowledges “it’s a different world” for airlines today, especially with the risk of smartphone videos of bad encounters between passengers and airline staffers going viral on social media. “The worst-case scenario could be taking everybody off the airplane,” he says of potential disruptions. “The goal is to get people to settle down.”
In reality, says Fornaro, “If you look at the statistics of air travel, in terms of on-time complaints and overall metrics, airlines today are operating better than ever before, although the public perception about airlines is probably quite low.”
In its earnings release in late October, Spirit reported third-quarter income of $60.2 million, or 87 cents a share, and a 15.1 percent operating margin. Spirit ended the quarter with unrestricted cash, cash equivalents and short-term investments of $964.4 million.
Hurricanes Harvey, Irma and Maria dealt a heavy blow to the airline during the quarter. Spirit is the second largest carrier in Houston and does 45 percent of its business in Florida and the Caribbean, Fornaro says. Because of the storms, Spirit canceled 1,650 flights and temporarily moved its operations team from Florida to Detroit.
Fornaro says Spirit carried more than 3,000 guests and more than 800 team members and their families to safety and has transported more than 100,000 pounds of relief supplies in joint efforts with the Red Cross and others.
“We got hit by all the hurricanes,” he says. “For a 10- to 12-day period, we were closing big parts of our operation. There is a big financial impact. Florida’s back to normal, but parts of the Caribbean will take quite a while to come back, particularly Puerto Rico. It’s every bit as serious as it’s pictured.
“There are people who cannot afford to fly out of there, so where we can we’re taking people out on our cost. Whenever we go in, we’re bringing supplies in. We have a lot of people in our company and others who want to donate, so to the degree that we can do it, we are doing it.”
Spirit started as a niche airline, with charter junkets to Las Vegas and Atlantic City, Fornaro says. Its business model changed when the 2008 recession forced all airlines to make changes. Like other discount carriers, Spirit has no partnerships with larger airlines to transfer customers if flights are canceled, Fornaro says — though depending on the cause of the delay, Spirit may buy you a ticket to get you to a destination.
“There are fewer of those partnerships than ever before,” he says. “The days, at least domestically, of turning customers over have largely gone away.”
Spirit and its pilots, represented by the Air Line Pilots Association, remain in open contract negotiations supervised by the National Mediation Board, read more here PrivateJetCharter.com. The company wants a five-year agreement, Fornaro says.
“We think we’re potentially close to a deal,” he says. “There’s a number of issues but we’ve put most of the issues behind us and I’m optimistic this can be done expeditiously.” Among the outstanding issues are governance, medical plans and pilot scheduling, or utilization of crews.
“That last one is probably the most important because one of the objectives of our airline is that we want our airline to run around our customers,” Fornaro says. “That supports quality air travel. That’s the biggest issue from the company’s perspective.”
