Spirit CCO Matthew Klein speaks on unfair competition practices in Senate hearing on airline ‘junk fees.’
A Spirit A320neo (Photo: AirlineGeeks | William Derrickson)
Matthew Klein, chief commercial officer at Spirit Airlines, said Wednesday that other airline CEOs were “trying to put [Spirit] out of business” during his Senate subcommittee testimony on airline fees.
The Senate Homeland Security and Governmental Affairs Subcommittee on Permanent Investigations met with airline industry executives at five major U.S. carriers to gather testimonies on the use of “junk fees” to boost profits.
Towards the end of the nearly two-hour committee hearing, Senator and Committee Chairman Richard Blumenthal asked Klein to speak on “the elephant in the room” – the lack of competition and barriers to entry in the airline industry.
Klein said that for a long time, Spirit has had a lack of access to certain airports and was limited with gates often positioned at the far ends of the airports in which it operates.
“… [It] makes it very difficult to provide a good guest experience,” Klein said. “It makes it very difficult for us to be able to operate efficiently and effectively. It raises our costs, which then, of course, makes it harder for us to be profitable – and without being profitable we certainly can’t grow.”
Klein said this profit loss was evident in Spirit’s Chapter 11 bankruptcy filing last month. He spoke on the negative impact of the blocked merger between Spirit and JetBlue that severely hindered the two low-cost carriers.
“That prevented us from really reacting and being able to do a lot of things for a couple of years,” Klein said. “Now we’re trying. We’re trying to improve our guest experience.”
A Spirit Airbus A321neo aircraft (Photo: Shutterstock | Kevin Hackert)
Klein also referenced the pilot shortage, which he called “manufactured” due to legacy carriers “poaching” pilots.
“Some of our legacy carrier competitors basically paid their most senior pilots to retire early,” Klein said. “That, in fact, caused the pilot shortage in the industry. Then they turned around and hired a lot of our pilots. These are pilots that are professionals, and they do a great, phenomenal job every day, but when they’re being offered a lot more money to work for somebody else, then they move to that.”
“Some CEOs have said how they’re gunning for us, they’re trying to put us out of business, they just can’t wait for that to happen,” he continued.
Klein’s comment about other airline CEOs trying to put Spirit out of business comes after statements from United CEO Scott Kirby ridiculing the business model of low-cost carriers.
Business Insider reported in June that Kirby said low-cost carriers were going out of business due to poor customer service and a “flawed” business model while on a “The Air Show” podcast.
While he acknowledged that competition was a natural part of the industry, Klein said that the rules of the game had changed – especially after the pandemic – making it difficult to compete.
“… Other airlines really like the model that we’ve created, but they’ve also created rules and barriers around how they get to control the game, and the rules can change whenever they want them [to],” Klein said. “We’re trying to play the game, and we do our best to play the game, and it’s just been difficult at times.”
Following its bankruptcy filing, Spirit started its “Project Bravo” reorganization plan aimed at meeting evolved customer needs and maintaining low costs. The carrier has furloughed 186 pilots this year and plans to cut 330 more early next year.
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