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Spirit Airlines CEO Ben Baldanza on the success of the airline’s business strategy.
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-- reports.
The airline industry has become infamous for losing money but Spirit Airlines has created a flight pattern -- consistent profit -- about -- Spirit Airlines CEO -- -- -- -- Fox Business exclusive from Davie Florida as we head into the holiday.
Travel season -- -- weakened following your story now offer a better part of a couple of years and find it absolutely fascinating that your an airline that's able to do this.
By embracing nickel and dime me tell me first how what is the airline situation looking going into the Christmas two weeks before.
-- -- -- -- -- -- -- -- -- -- And down you know that -- -- is that the Christmas Chanukah season is traditionally a very strong volume period for the airline industry.
And this year seems to be no different people still -- Santa -- and we're seeing very strong volumes heading into this Christmas and.
OK people in freezing temperatures look to see Santa -- in Florida that that that's -- -- be -- I think I'm sure your bottom line I in November traffic them at.
Up 28%.
To what do you attribute that move and can you best that number in the month of December.
Well it would have been even better if not for the the terrible things that hit the northeast -- -- sandy of course but generally you know -- model is doing great because we offer low prices and consumers respond great to low prices.
Spirits fares -- the lowest in the industry in.
Even after -- -- the fees of baggage and -- think that the total price still ends up being lower than the next best option and people like that.
Can -- rather spend money on their hotel or are buying great -- they don't wanna spend on the.
-- -- Listen I know -- at its working for you guys because it listen you have absolutely done pretty darn well -- up about 8% year over year it's not exactly you know killing the S&P but then I'll give it to you and I'm.
Don't -- you talk about.
-- and dining and again you guys do embrace that but -- are getting customers.
Saying look that we get it you pay for an extra -- you pay if you want a -- even -- target for boarding passes so so my question becomes.
You are sort of adding on to the expenditures and they still come out on top but.
They're psychologically not joining.
How can you improve that experience -- that they stop I mean listen you guys are getting a lot of negative tweets out there that is one of the things that we did notice.
Well one way to stop it is -- stop -- Nickel and -- even call it choice which is really what it is.
Because what it does is that lets people pay only for what they use and not subsidize their neighbor.
And so we think -- it has a choice program you pay for what you use but importantly you can save money if you don't use it or you don't pick it.
And customers really like that -- like saving money they like having the ability to.
I just their final price point that you put everything in their shopping cart and say you know.
I'm spend a little too much maybe I'll carry one less -- this time or they might get to be anything you know this isn't that bad maybe -- -- big front seat.
And spend a little more and it allows them that flexibility as opposed to just here's the price you gotta -- -- -- and and we cannot forget that always at the forefront to hear your cerebellum has an airline executive you've got to look at oil prices you've got to look at jet fuel hedging it's at -- oil around 86 dollars a barrel.
It got to be so -- at one point the delta said -- to get Smart here and they they outright -- an idled.
Refinery.
From.
Phillips 66 in an effort to control fuel costs how are you gonna get creative what are you doing.
Well you know -- that that was a bold move by delta for sure and one of the things it was reflecting the fact is that oil prices move but so does the refining costs which we golf.
The crack spread.
So what we really have to look at in our business is jet fuel prices and how they change.
We've seen times when.
Oil prices dropped but jet fuel stays the same because the refining costs just expands.
To cover the difference so what we do it spirit is we try to be really efficient we have a young fleet of airplanes that doesn't -- a lot of fuel.
And because we put a lot of -- on -- airplane and we actually burn less fuel per seat -- any other airline in the U wraps.
So that gives us a little bit of an advantage -- fuel prices change.
Because we don't -- as much perceived as all the other guys do it also makes as the greenest airline.
-- -- there.
And we got to go but today it's just moving on the tape that John Boehner spokesperson is now confirming that a 5 PM eastern he will meet with the president.
Maybe -- this logjam will be broken up but the fiscal cliff talks if you -- both of their -- what would you say really quickly.
I would say that my bet is is hoping for that John Boehner wins them that would fight on spending cuts.
I'm spending catching up just getting to a balanced -- needed to certainty is obviously good for the economy.
Spent about that's Spirit Airlines CEO great to see you have a good holiday season.
Which.
