The Motley Fool Previous Page


CEO Gaffe of the Week: Spirit Airlines

http://www.fool.com/investing/general/2012/05/04/ceo-gaffe-of-the-week-spirit-airlines.aspx

Sean Williams
May 4, 2012

This year I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions last year when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week I want to highlight the CEO of Spirit Airlines (Nasdaq: SAVE  ) , Ben Baldanza.

The dunce cap
Days like yesterday make you wonder if airlines really do hate their customers.

Not more than a few weeks after I pointed out some of the most egregious charges in the airline industry did Spirit Airlines go above and beyond with its announcement that, as of Nov. 6, it would be charging $100 for both domestic and international carry-on baggage checked at the gate. No, your eyes aren't deceiving you; I really did say $100 for a carry-on bag!

In addition to this $55 price hike, Spirit noted that it would be increasing the price of carry-on baggage checked with its airport representatives and its kiosks from $40 to $50 as of Nov. 6.

Now here's the truly odd part: The company is actually lowering the price by $3 for checked bags on international flights if you make the purchase online, but raising the price by $2 for domestic flights if paid for online. In short, the pricing leaves consumers even more confused than they already were regarding Spirit's "optional fees" pricing.

These moves are nothing new for the airline sector. Allegiant Travel (Nasdaq: ALGT  ) followed in Spirit's footsteps by instituting a $35 carry-on baggage fee just a few weeks ago, while others, like Delta Air Lines (NYSE: DAL