Spirit Airlines is famed for its ultra-low-cost operations in the United States aviation industry. This approach has largely paid off for the carrier over the years. It was the arrival of Ben Baldanza that helped the airline stabilize with this model in the market. The carrier’s former chief executive officer spent over a decade with it since joining in 2005. Let’s take a look at his journey with the company.
A veteran in the game
In January 2005, it was revealed that Baldanza would leave his post at US Airways as senior vice president of marketing to head to Spirit. The businessman had been in charge of route planning, scheduling, and pricing, as well as marketing for the veteran operator.
The Rome, New York-born economist, had been at US since the beginning of the millennium, but his tenure in the aviation industry didn’t begin at the carrier. He started his journey with American Airlines before heading to Northwest Airlines and UPS. Baldanza also had senior positions at Continental Airlines before becoming COO of TACA Airlines. He even served on the board of directors of Frontier Airlines while at TACA.
Putting the expertise to good work
This expertise would prove vital for Spirit from the get-go. The initial positions that Baldanza held at the firm were president and COO. However, in the following year, he became the CEO. During the period of his arrival on the scene, the Florida-based outfit was reporting yearly losses of $79 million. However, the executive had a plan to turn things around. He launched new sunny destinations, upgraded aircraft, and brought a fresh team to the fold.
“In the past [the airline was] not always a competitor whose decisions were easy to understand,” Baldanza said, as reported by FlightGlobal in 2005.
Now, with a focused strategy, we are giving people a reason to choose Spirit, to make the airline relevant. The traffic is there. If we can offer people something more than just a low price, they will catch the spirit.”
After a year of hopping on the board, a quarter of Spirit’s routes were to destinations outside of the United States. Moreover, the US-Caribbean capacity grew to nearly 4%, making it the fifth-largest airline in the segment. The company ultimately transformed Fort Lauderdale into a genuine connecting hub.
From January 2005 to March 2006, it added eight Caribbean services from Fort Lauderdale. In total, it was offering 22 routes from the airport. Within a year, Spirit developed from 50 city-pair markets to approximately 170 with the same capacity. During this time, the airline transitioned from its MD-80 aircraft to a modern Airbus fleet. This move would offer the company considerable savings by letting go of aging, inefficient models.
A significant shift
Even though Spirit was heading a low-cost operation before Baldanza’s arrival, it became even more discounted in the years that followed. The airline introduced minimal fares and charged fees for many additional services, such as seat options, baggage, and food & drink.
These initiatives were met with significant criticism, and Baldanza even faced a US Congress hearing regarding the unbundling policy. However, he largely remained unapologetic and defended the model.
The approach proved to be worthwhile from a business standpoint as Spirit became profitable under Baldanza’s leadership. Notably, during much of his time at the top of the carrier, several competitors were struggling financially amid market pressures and economic crises.
By the time 2011 rolled around, Spirit was earning 40% more per aircraft than its rivals. Nonetheless, it wasn’t just pricing measures that helped it grow. Baldanza’s teams introduced smart strategies that included the selling of advertising spaces where possible on the plane. It became the norm to see advertisements on seatback trays, overhead bins, napkins, cups, and sickness bags. Even flight attendant uniforms had promotions on them!
Speaking of adverts, the carrier also introduced its own commercials that often went viral. Jumping on pop culture trends and slipping in innuendos helped campaigns spread across the world, saving money on expensive ad campaigns.
A prominent figure
Baldanza stepped down from his post as CEO and president in January 2016. This move came as a surprise across the industry. However, he affirmed that there was a plan in place for this transition. Altogether, his work at the Spirit didn’t go unnoticed, and he received a warming farewell from the company.
“Ben was instrumental in transitioning Spirit into a highly successful ultra low-cost carrier, a significant achievement in the airline industry, which benefited our employees and customers,” Spirit chairman H. McIntyre Gardner said in response to the change, as per a press release seen by Simple Flying.
“On behalf of the Board and everyone at Spirit, I would like to thank Ben for his contributions, dedication and stewardship these past ten and a half years as Spirit’s business model has become firmly established as a critical low-fare choice that consumers appreciate when thinking of air travel. We wish Ben and his family all the best.”
Baldanza remained busy after leaving his post. He presently serves as a director and chairman of the audit committee of JetBlue Airways. Moreover, he is on the board of Go Air and Six Flags Entertainment. Along with these positions, he is an operating partner with Sterling Investment Partners, a private equity firm, and also fulfills his role as Adjunct Professor of Economics at George Mason University.
What are your thoughts about Ben Baldanza’s time at Spirit Airlines? What do you make of his journey with the carrier over the years? Let us know what you think of the executive’s role in the aviation industry in the comment section.