Spirit Airlines CEO Thinks There’s Plenty of Room in Ultra Low Cost Carrier Club

Spirit Airlines CEO Ben Baldanza says he isn’t concerned about Zagat reviews or media criticism, and the main thing that concerns him is that the airline might get “soft” as it grows, with employees less focused on saving every penny or needlessly buying a new airplane.

That being said, Baldanza argues that Spirit Airlines, which has pioneered a bevy of fees, including for carry-on bags, says it offers the lowest fares, including ancillary fees, of any airline in the U.S.

“That’s why customers who actually fly us really love us,” Baldanza says.

Speaking at the Raymond James Global Airline Airline Transportation Conference in New York City today, Baldanza had kind words for his peers at competitor ultra low cost airlines, or those trying to become one, including Frontier and Allegiant.

Ryanair Points the Way

Baldanza says Ryanair, with around 300 aircraft, has a 10.7% share of the European airline market, and Spirit, with 50 airplanes, has only 1.4% share of the U.S. domestic market.

With similar models, that means there is plenty of room for Spirit, Frontier and Allegiant to grow in the U.S. he argued.

Former Spirit chairman Richard Franke led Indigo Partners’ recent acquisition of Frontier from Republic Airways, and Baldanza expressed confidence that Franke can turn Frontier around, although the Spirit CEO expects it will take time.

Unlike Spirit, Frontier is dependent on connecting passengers, in this case through Denver, uses aircraft not particularly suited for the low-cost model, has TVs on its planes, and is more unionized than Spirit, Baldanza said.

“If they are successful, there will be plenty of room for both of us,” Baldanza said of Frontier.

Synergies With Allegiant

Meanwhile, Spirit has no debt and lots of cash, and Baldanza, speaking of Allegiant, said “there’s actually a nice synergy there.”

The synergy is that Spirit focuses on big cities, and Allegiant relies on small cities, Baldanza said. Both airlines go after the leisure market.

Baldanza pointed to some 500 routes where the ultra-low cost model, whether practiced by Spirit, Frontier, Allegiant or other airlines, would find great opportunity.

Said Baldanza: “We believe there is an enormous opportunity for us, or carriers structured like us.”

The jury is out on Frontier, but these three kindred spirits, in theory at least, could find plenty of room to grow.