Friday, May 4, 2012

FOXNews.com: Turbulence at Spirit Airlines After CEO's Comments

FOXNews.com
FOX News Channel - We Report. You Decide. // via fulltextrssfeed.com
Turbulence at Spirit Airlines After CEO's Comments
May 4th 2012, 16:04

It's been 24 hours of turbulence for Spirit Airlines chief executive Ben Baldanza since he waved off his airline's "irrelevant" industry-worst customer complaint record in an exclusive interview with FoxNews.com.

After reaching a 52-week high in early morning trading, Spirit stock reversed and dropped 5 percent Thursday after Baldanza's morning telephone interview and the announcement that putting a bag in one of the airlines' overhead bins could soon cost $100 — or more than the airline's average ticket cost of $76. The airline had already been under fire after its denial of a dying former Marine's refund angered veterans groups around the nation.

Meanwhile, as support for a "Boycott Spirit Airlines" Facebook page jetted past 30,000 supporters early Friday — up from 700 earlier this week — a second Facebook page is now calling for Baldanza's ouster.

"Facebook facilitated the fall of Egyptian dictator Hosni Mubarak ... now we must force Ben Baldanza out," the group's description reads. "His actions towards a dying veteran and his airline's customers are reprehensible. We have the power to make him resign!"

Another entry called Baldanza "not smart enough" to predict the backlash for not refunding veteran Jerry Meekins $197 for a ticket from Florida to New Jersey after his doctor told him he was too sick to fly. Meekins, 76, of Clearwater, Fla., ultimately drove to New Jersey, spending more than $300 in gas to fill his Ford Explorer.

"Was [Baldanza] really not smart enough to see the backlash this would create? Or does he really not care? Either way ... bye Spirit," the post read. "I'll never purchase a ticket with you."

Baldanza acknowledged Meekins' "tragic situation" on Thursday, but stood his ground on nixing the veteran's refund request. Making an exception would be like an insurance company paying to fix a fire-ravaged home even though the owner didn't have a policy before the fire, he said.

"Had we done that, I think it really would've been cheating all the people who actually bought the insurance," he said. "And I think that's fundamentally unfair."

Others weren't buying that argument.

"Rules are meant to be broken in the right circumstances and when you make a compassionate decision to bend a rule, the results in good will can more than compensate for any lost revenues," read a post on the new Facebook page. "I cannot understand why ANYONE would give this airline one single dime in revenue."

Spirit Airlines stock was trading at $22.60 an hour into Friday's session, down from a 52-week high of $24.75 on Thursday.

The Miramar, Fla.-based carrier offered Meekins a credit voucher and an opportunity to change his flight for a fee, Baldanza said.

"But he didn't want that," he continued. "He wanted his cash back. And there just wasn't a way we could do that without essentially cheating all of the other customers at the airline … He's asking for a product that he didn't buy."

Meekins has said the offer of a non-transferable credit voucher was useless to him since doctors said he isn't healthy enough to fly.

Baldanza noted during a post-earnings call on Tuesday — in what's believed to be an industry first — that Spirit passengers paid more than $50 apiece during the first quarter for so-called ancillary services like checked bags, carry-on baggage or drinks. Those ancillaries accounted for more than 40 percent of revenue in the quarter, Baldanza said, compared with 34 percent a year ago.

In the FoxNews.com interview, Baldanza also downplayed the airline's industry-leading rate of customer complaints in January.

"That's an irrelevant statistic," Baldanza said when told his airline generates gripes at two-and-a-half times the rate of the next most complained about carrier.

Spirit racked up 8.27 complaints per 100,000 passengers in January, while United finished a distant second-worst, registering 3.5 complaints per 100,000 fliers, according to U.S. Department of Transportation statistics. By comparison, Southwest notched just 0.2 complaints per 100,000 fliers.

Asked Thursday whether the airline owes more to stakeholders or its passengers, Baldanza replied: "The answer is both, of course."

Baldanza spoke by telephone to FoxNews.com Thursday after a Spirit spokeswoman first requested but then declined offers for Baldanza to appear on-air on the Fox News Channel to explain his position. Asked Friday if Baldanza had reconsidered, Spirit spokeswoman Misty Pinson replied: "I'll be seeing him this afternoon."

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