In what appears to be a surprise move, Spirit Airlines Inc. (NASDAQ: SAVE) on Tuesday announced that Robert L. Fornaro has been named the company’s president and CEO, effective immediately, replacing Ben Baldanza, who had served in the role since 2006. The announcement noted only that Baldanza had recently moved his family to the Washington, D.C., area. Spirit is headquartered in Miramar, Fla.
Spirit has had a tough year. The stock is down nearly 50% and the ultra-low-cost carrier has faced price challenges from larger carriers that lately have begun to push back against the low fares offered by Spirit and other ultra-low-cost airlines. Low fuel costs, among other things, have enabled larger carriers like United, Delta and American to compete on price.
Fornaro was formerly CEO of Air Trans, now part of Southwest, and was a member of Spirit’s board prior to his new appointment.
There are two possible contributing factors to the change. First, Spirit increased its seating capacity by 30% in 2015, perhaps anticipating growth in the longer term. But the increase also hit profitability. Spirit had the best profit margin of any airline early last year, but that lead has eroded as the company added capacity.
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