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The ruthless strategist changing how we pay to fly
Question of the Day
“I feel like the guy who shows up at the airport not realizing that Spirit charges for carry-on bags,” I mutter.
“You shouldn’t have bought your ticket on Orbitz,” Baldanza shoots back.
Transparency remains one of Spirit’s biggest challenges. Passengers booking through the airline’s website typically understand Spirit’s business model. Those booking through third-party sites often don’t learn of the extra charges until they arrive at the airport. For instance, passengers who fail to pay in advance for large carry-on bags are dinged $100 at the gate.
Baldanza recognizes that Spirit needs to be “a little friendlier, meaning that more and more of our customers actually understand the model.” He’s making a big push this year to better align expectations with reality.
As he buys up cities on the board game, Baldanza’s reasoning becomes clearer: If passengers see the fees as potential enhancements rather than punitive charges, they might be willing to buy more.
Earlier in the day, I visited Spirit’s headquarters - which incidentally sits next to a collection agency in a Miramar, Fla. office park. While there, I spied a framed copy of a profile I did of Baldanza three years ago with the headline: “Meet America’s king of airline fees.” The word “fees” is covered up with a piece of paper saying “options.” During a pause in the game, I ask him about the change.
“We’re not adding more fees anymore,” Baldanza says. “We’re selling people more things that they never would have considered part of the base ticket.”
That means hotels and car rentals for now and maybe scuba diving tours, Cirque du Soleil tickets or ski packages in the future.
Baldanza also plans to change the structure of some existing fees, increasing or decreasing the price of checking a bag or picking a seat based on demand.
“The idea that a bag is more expensive at Christmas than it is in September hasn’t really been broached yet,” Baldanza says.
Baldanza’s ultimate dream - if the government would let him - would be to create two components of a ticket: the price of fuel and everything else. Passengers would pay more or less, depending on the cost of fuel the day they fly.
“It just takes out a huge risk,” he says. “I don’t know that we’ll ever get there, but the idea of being able to make fuel a true pass-through would be revolutionary for the industry.”
We take a break from the game for dinner. Baldanza has set out barbeque beef and chicken, corn muffins, potato salad, baked beans and mac and cheese - the type of food fliers can only dream of.
Other airlines are trying to win over passengers by adding individual TVs, power outlets, larger overhead bins and Wi-Fi. The battle is even fiercer in the premium cabins of flights between New York and Los Angeles and San Francisco. There, airlines are adding lie-flat beds previously only seen on international routes.
Baldanza thinks it’s all foolhardy.
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