Spirit is Fulfilling Its Promise to Run a Better Operation


If you’ve flown Spirit lately, you may have noticed something surprising: the airline is running a better operation than it has in years. It looks like it’s living up to the promise its new CEO made a year ago to actually run a better airline.

When Spirit’s previous CEO and architect of its ultra-low cost strategy, Ben Baldanza, left the airline, Bob Fornaro was brought in to replace him. Spirit has done a lot of things right, but it had issues, including what I consider to be its Achilles’ Heel, a poor operation. Last January, I wrote that I was cautiously optimistic about Bob.

I really hope this is someone who sees value in slowing things down and running a stellar operation. That would be a big change, but it’s one that everyone would welcome.

In the fourth quarter 2015 earnings call (done about a year ago), Bob made it clear that his vision was indeed to get the operation humming better than it was. But how long would it take for us to see changes? It turns out, the answer was May. That’s when Spirit was able to make some operational tweaks.

Now that we have the full year of Department of Transportation Air Travel Consumer Reports, we can look at the official numbers and see what kind of progress has been made. Normally I use masFlight’s real-time data for operational performance, but in this case, I like the official numbers. They are for domestic flights only, and since Spirit runs a very different kind of international operation than the other airlines, using domestic numbers seemed like the best way to get as close to an apples-to-apples comparison as possible.

Here’s what Spirit’s on-time performance looks like for the year.

Not bad, huh? As you can see, the beginning of the year was fairly typical for Spirit, lagging far behind the other airlines. (Remember this is just the airlines that report in the US, so it doesn’t include the smallest guys, but it’s still a very good comparison.)

Once May rolled around, a new schedule and operational design clearly had an immediate and significant impact. The last quarter of the year saw the airline close the gap even more to a fairly respectable number.

And it’s not just on-time performance either. Spirit used to say it would try to never cancel a flight. It would just delay it forever and then eventually run it, but that wasn’t really true. It still lagged the other airlines in that department. Here’s how 2016 looked with that metric.

Other than a very bad October, which I didn’t have time to research but I assume is related to a specific event or set of events, Spirit has again improved its performance substantially when compared to the industry.

I don’t know that we’ll see much more improvement than this. My guess is Spirit is going to be happy sitting just below the industry’s average performance since it is going to try to run its airplanes harder than the rest to keep costs down. With any luck, I’ll be proven wrong and Spirit will strive to be better, but I can live with this kind of performance.

This is great news for people like me who are hesitant to fly Spirit because of its poor performance. Now that it’s running better, it should start creeping back into the decision set for a lot more travelers. (Frankly, a Big Front Seat is one of the best values in the sky, so combine it with an on-time flight and you’re sitting pretty.)

Of course, the relatively easy part is improving its operation. It’s a lot harder to improve its reputation. This will clearly take some time, and people will rightfully be wary that it’ll stick. But if Spirit does keep it up, then it’ll become much more competitive with other airlines.

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21 comments on “Spirit is Fulfilling Its Promise to Run a Better Operation

  1. The reason Spirit had to improve is simply because the ultra low cost carrier model which NK and Allegiant and Frontier use cannot succeed unless operational reliability is on par with the rest of the industry. NK is changing a lot about the airline service model but customers still buy air transportation first and foremost to get someplace with some reasonable level of certainty. Customers simply aren’t willing to try another airline or type of service if the reliability is so low that the reason for one’s trip is at risk.

    Because NK skims off the most price-sensitive customers in markets, they don’t have enough frequency to be able to protect customers if there are operational problems, an advantage low cost and legacy carriers both have. Add in that legacy carriers are aggressively competing for some of the same passengers using their economy basic type products and Spirit has to compete with the higher levels of operational reliability that the legacy carriers are offering.

    Further, the ultra low cost carrier model in Europe has worked and, despite lots of other criticisms of them, their operational reliability is at least in the ballpark of other carriers.

    Customers will choose a lower cost and alternative method IF operational reliability is somewhat comparable to other choices.

    thanks for the article

  2. Perhaps the October slump was caused by the brief closure of FLL for hurricane matthew? All airlines at FLL canceled flights, but being a major operating base for NK would have a larger effect on their numbers than any other airline.

    1. FLL was closed for less than 24 hours. MIA, AA’s hub, was closed longer and it took AA’s operation longer to come back up due to their larger number of planes needing to be relocated and brought back.

      NK has done a lot of flight schedule changes where some cities are now served at a different time of the day (an hour can make a big difference at some airports in taxi times to/from the runway). Some things that passengers don’t see like changing of hotels that their crews stay at will also affect their schedules. In FLL, they moved to a hotel that is 6 miles closer to the airport. This occurred in October as well.

    2. BTW, Spirit would be on par with JetBlue and Southwest in the size of operation in FLL as they all are close to equal in the number of departures/arrivals on a daily basis.

  3. Simple logic to the big shots of the company should tell them that the better run the airline is the more it can make money then having bad service and delays and cancelled flights. Travelers may still like lower fares but they do want to get to their destination pretty much when the schedule says they should, so better run means better service which means people are willing to try them and use them so more money.

    1. While true from a customer perspective, not always true operationally. Don’t get me wrong, I like on time planes, but think of it this way–In order to ensure a flight is on-time, you need a plane on time at the start of the day, and ensure it stays on time during the day. This is hard for spirit who runs a lot of flights per plane per day (high utilization), and usually not hub-out city-hub. So you might have to cut a flight during the day to make up for this extra time. Planners think in aggregate – so ~15 mins added to each flight could be a half-airplane over a whole schedule (varies by schedule). To make it on time for each flight, you usually have to pad 2 things – time on the ground (where the plane isn’t generating revenue) and/or time in flight (where you are paying crews, fuel, etc.). As planes rotate for unscheduled maintenance, you need alternatives – so throw a spare plane in each focus city, an extra engine or two around the system, and other spare parts (all this costs $ in inventory, and a spare plane ain’t cheap). You can quickly get to a point where the short term costs needed to be on time outweigh the long term customer service impact. Especially when you target price-conscious people. It is more than just employee attitude, though that helps.

      It was one thing on routes where Spirit was the only operator, now that they are going into more competitive markets, the need for service rises. As more people try them, the reputation becomes a bigger deal. As more flights in the system, the cost of spares and slack time attributed to each flight decreases making it more attractive. This is a logical next step in Spirit’s growth, and good for them for trying to run a good operation. Low cost does not have to mean poor operation and rude service.

  4. imo, it makes it more likely for people for whom this kept them on the fringes. For me, it is not enough because of the nickel and dime pricing.

    1. btw, neither is the basement (nicket & dime) with more “benefits” over ullc the legacy carriers are rolling out. for ex: only middle seat even if a window or aisle seat is avaiable….insane, even if it’s just testing the waters.

      why focus on the masses if your focus is on the execs who buy their highest fare or volume therof? do they profit off the margin…i.e. from the nickel and dimed masses that carriers may fear the ullc are and will significantly affect it now and in the future? are the ullc the new southwest?

      a sensible compact response, if possible, would be appreciated?

      1. IO – Yes. (How’s that for a sensible, compact response?)

        American had a stat that something like 80+% of passengers fly the airline once a year. Of course, the rest of the passengers account for a much higher percent of revenue, but American needs to fill those seats and lot are with cheap fares. If it can’t, then it can’t run as high of frequency, and that’s going to impact the bread-and-butter travelers.

    2. its an A la Carte airline if you don’t want to pay. don’t check in bag! just bring a bag that fits under the sit in front of you. don’t want to pay for drinks bring your water or soda! don’t bring a whole lot of clothes and just bring one SEX Toys IO !

  5. It doesn’t seem likely to me that the sort of budget-minded leisure traveler that Spirit has in mind is likely to be checking graphs like these. Seems to me that this is more of a long game: (improve reliability) -> (improve public perception of reliability) -> (leisure travelers less likely to avoid). This makes sense, but it’ll take a while.

  6. As a shareholder this is what I like to see. Just can imagine how many economy basic seats the big 3 have for sale. On the cost side NK is just too low.

    NK customers are mostly bus people and weekend day trippers.

  7. It would be interesting to see how it relates to aircraft utilization and block times. doesn’t mean they cheated, its just there is always a trade-off, can only make so many gains by providing better operational management.

  8. Thanks for doing the research and sharing these results Brett. Couldn’t agree more that due to Spirit’s poor operational performance they weren’t a consideration before but now might be.

  9. Reputation-wise, if underlying stats improved, it could pull a Ryanair and launch an ‘always getting better’ style campaign. I remember how loathed Ryanair was when, much like spirit is doing now, it used to push everything to the absolute limit to make as much money as possible, but to the detriment of its customers and therefore repeat business.

    Fortunately for the flying public Ryanair is one of the most on time airlines in Europe.

  10. So this got me pondering, how far could an airline stretch their block times to get an ontime performance?

    Say could an airline file block times of a flight leaving at 11:30 pm PST, arriving at 3:30am PST (6:30am EST), but with a planned operating time of 2.5 hours, so they’ll be on time leaving as late as 1am?

    This airline’s D0 would suck, but A14 might be really good.

    This way an airline could work their planes reallllly hard but still give themselves adequate time to recover along the line and be ontime. I guess the question is if an airline is willing to manage the GDS hit from having really long flight times, but balance it with the low prices. There is also the reputational question will people like being early? Will they be fine sitting a lot longer at the airport? (on either end)

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