Brash, fee-happy CEO of Spirit Airlines abruptly replaced

Ben Baldanza, who led the industry push for more and more airline fees, is out as CEO of Spirit Airlines.

Spirit was losing money until Baldanza, 54, took over in 2006. He oversaw the airline’s transformation into an “ultra-low cost carrier,” an airline that didn’t include anything in its base fare and charged extra for seat assignments, snacks, soda and even using the overhead bin. To cram more people into its jets, Baldanza stripped passengers of the ability to recline their seats. He spun the move as making the seats “pre-reclined.”

But investors had soured on Baldanza recently as the carrier continued to miss financial estimates and its stock fell behind the industry, said Adam Hackel, an associate analyst at Sterne Agee. Spirit shares fell 47 percent last year, compared with a 4.6 percent decline for Bloomberg’s U.S. Airlines Index.

Robert L. Fornaro, who led discount carrier AirTran before its sale to Southwest Airlines, will take over as CEO immediately. Fornaro, 62, has been a Spirit board member since May 2014 and has also been an executive at US Airways and Northwest Airlines.

The shares climbed 5.9 percent to close at $41.50 on Tuesday in New York, the biggest gain in two months as analysts speculated that Spirit might pursue a merger with Frontier Airlines Holdings, another ultra-low-cost carrier.

Under Baldanza, the airline expanded rapidly, including at Dallas/Fort Worth Airport, where it is the No. 2 carrier in terms of destinations served, behind American Airlines, which dominates traffic with its hub operation. Spirit, which launched service at DFW in 2011, currently serves 23 destinations and operates 28 daily flights from Terminal E.

Spirit’s expansion at DFW flummoxed Rob Pickels, a portfolio manager at investment firm Manning & Napier. American moved to match Spirit’s low fares, a major reason its stock faltered. Had Spirit focused more on a market like Phoenix, the airline might not have attracted as much attention from its rival, he said.

Known for his brash, no-excuses style, Baldanza said that if people didn’t like the fees, they could fly another airline. Baldanza at times reveled in the animosity that he helped to generate. Taped to the side of a corner bookshelf in his office was an expletive laden email from one disgruntled traveler that, in part, read: “I just want to let you know that your company sucks and your policy will run it into the ground.”

“Following the tremendous growth and success of Spirit over the last 10 years, the board and I have concluded that this is the right time to implement an orderly succession plan,” Baldanza said in a printed statement released by the Miramar, Florida airline.

This story was originally published January 5, 2016 at 10:40 AM with the headline "Brash, fee-happy CEO of Spirit Airlines abruptly replaced."