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An Airline for the 99 Percent: Spirit Airline CEO Speaks Out

Locations in this article:  Atlanta, GA Chicago, IL Dallas, TX Fort Lauderdale, FL Las Vegas, NV Philadelphia, PA Pittsburgh, PA St. Louis, MO

PG: From a business perspective, every airline has this challenge. At least it did, right. yyou get to the point where you wanna grow but you get to a point of diminishing returns where you become too big for your own good. How do you manage that growth?

BB: That’s a great question and it’s something we spend a lotta time at Spirit thinkin’ about, actually. We’re growing at 15 percent to 20 percent a year right now. Now, that’s from a small base. But it’s still huge. And we’ve been doing that for the last couple years.

We’ve converted to the newer Airbus-8320 fleet. And now we have 49 planes. We had 32 that were flying about nine hours a day, too. And so now we have 49 flying 13 hours a day.

Now we’re close to $1.3 billion in revenue when we were at half a billion when I started.

It’s a lot of growth in revenue, a lot of growth in flight, lot of growth in passengers.

We’ve had to manage that by staying ahead of the growth. So what we do is build customer databases, meet the customers in cities before we fly thereby getting them linked into our e-mails. We come in with a real low price point that stimulates the traffic base and we get a lot of trial for that. We don’t win traffic long term on the trials. But people come to the airline

The way we have to keep moving is to keep our costs low. And the way we keep our costs low is just keeping the airline really simple. We have a real simple process. We treat every customer the same. We don’t have all kinds of exceptions that if you carry this badge or you paid this ticket or you look a certain way, we’re going to treat you differently, we don’t do any of that.

PG: When you announce boarding, what happens?

BB: We have three zones. We board zone one, zone two, and zone three. And you know how you get a zone one boarding pass on Spirit? You buy the carry-on bag. The only people who get zone one are people who bought the carry-on bag. They bought the right to own the space above the seat in front of them. So they get on the plane first and they put their bag there.

Everybody else boards zone two or three, they just walk to their seats. It’s real simple. If you’re a ticket agent at another airline– I probably need to train you and have a system that supports the fact that some of my customers are this tier in the frequent flyer program, some
are coming to me with a different code from my alliance partner. Some only pay this price. Some bought from a third party, some bought from me. And based on that, I charge them for their bags or I don’t. I have to make sure I smile especially for them, or I don’t. (LAUGH) Right, they have all kinds of different things.

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