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Spirit Airlines CEO Ben Baldanza on how add-on pricing benefits passengers as well as the airline.
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Ticker -- say up 52%.
That's year over year -- -- what do they do what they've got a strategy for an airline.
Ultra low base fares for airline tickets with a lot of -- -- fees add -- It's working I'm not even gonna ask does that really work its working for Spirit Airlines the airline company is lowering average ticket prices keeping its add on fees.
And planning to quadruple its fleet by 20/20 one.
Their final lot of airplanes they must be growing let's -- the real story from Davie Florida Spirit Airlines CEO and president.
Then sell them to I don't know why you're smiling immediate listen you come here all the time you've got a good story to tell -- up as we model well -- look at this and let's say.
While -- you've got a lot of bolt ons and add ons which.
From the base -- suddenly it's jumping exponentially but talk about what is working best for you guys right now.
Well what works great for us -- and it's great to see again.
But -- great for us -- the fact that we can take a very low entry price survey low fare just 81 dollars in the second quarter.
And then give consumers a whole range of other things that can make the trip a little easier nicer.
They can choose to carry bags or not they can choose to pick where they set on the plane that he used to join -- fare club that did you -- drink.
But the great news -- you only pay for what you use you don't subsidize anybody -- usage.
So year end up the total price you pay ends up being lower on average that your next best choice.
-- like can you just put that I'm not subsidizing what anybody else uses but that we want to show people look okay.
You flight out of many different places out and even a lawyer called the regional you want to San Salvador.
We -- saint Maarten.
Let's just say I went to saint -- I'm looking I'm saying -- out by the ticket tickets 310 dollars and sixty cent the base price rather to 1749.
Next thing you know all I think I need to carry on you -- one of only two airlines that charge to carry on.
And yes I haven't purple shirt.
And then you out on another -- and then you want some food because everybody has to eat there's a checked -- and suddenly your 37369.
But yet people like -- talk about the psychology.
Of why.
This seems to be such a home run you talked about it -- from the standpoint of I'm not subsidizing what other people are doing but.
At some point it's another hundred bucks.
Well it's -- maybe another hundred bucks but.
It's a decision that's made maybe even different than deciding to go to saint Maarten in the first place right.
I mean -- you decide what you're gonna care you decide you're gonna eat when you went into your hotel on that trip.
Did you know when the price of your room which you're gonna pay for -- five.
-- how much you're gonna pay for dinner that -- permit you have to pay to park your car.
You know all those things well that didn't ruin your hotels they didn't know -- but I and I made the choice and that's really what you're doing our -- the big legacy carriers of what's there now only four.
-- there's so much you know merger and acquisition activity near industry but -- the what does it got started to copycat.
Well we're seeing you know we're seeing more of this kind of on bundling happening throughout the industry we probably doing a little more than others but what we've what that does for us is allow -- to have the lowest fares of everyone as well.
-- -- we just -- 81 dollar fare in the second quarter that's pretty awesome we think.
And that creates a much larger traveling market.
So we're able to fly to many places that are significantly lower price point and that brings more and more people into the traveling market which you think is good for the economy.
What's good for you I mean that you plan to quadruple your fleet by the year 2015 that means you go for 42 planes -- -- 160 must have some -- they're 20/20 -- -- -- when okay.
But Broadway video let me tell you they hear that because that's just -- -- and it it shows that you guys are healthy and at least doing well above lesser over leveraging which I hope you wouldn't do but.
The US appeals court in this -- -- matter to you guys because you were breaking out.
The tax that government what you call a government -- the -- before the actual airline ticket now they're saying up to just solution altogether.
They call that transparency.
I'm confused -- -- a transparent I I liked it better when you could see what the actual tax one.
Well you're clearly a Smart woman lives because it's actually a step back and transparency.
A -- in January when this law was passed we will we became compliant on the day the law when in fact -- and we being -- -- since.
But we've been fighting it because it is a step back and transparency.
You used to see I've paid sixty dollars for the ticket and forty dollars -- my tax and now -- pay -- hundred dollars now we can only advertise the hundred dollar -- you don't really see.
What you're paying the airline and what you're paying the government.
We see this is kind of the thin end of the wedge first -- the -- then you raise it right.
-- your your managing -- -- figuring it out cause the stock is up 52% over the past year good to see you.
They see you -- spent about -- Spirit Airlines CEO and president can't really act like an airline's president they're usually very.
-- -- -- -- It's easy to talk.
