Airline Mergers Stabilize the Industry: Spirit CEO

Wednesday, 20 Feb 2013 | 10:44 AM ET
Spirit Airlines CEO on Big Earnings Beat
Ben Baldanza, Spirit Airlines president & CEO, explains how his company is able to remain profitable, and weighs in on rising gas costs and the merger trend among airlines.

The recent merger between AMR's American Airlines and US Airways is a continuation of a longer trend and will help bring stabilization to the airline industry, said Ben Baldanza, CEO of Spirit Airlines.

"It also means likely that the gap in costs between Spirit and bigger players is getting wider, which creates more growth opportunity for us," he told CNBC's "Squawk on the Street."

(Read More: The Matchmakers Behind the AMR-US Airways Marriage)

On rising prices, he noted that gas prices are a "real issue," costing both customers and companies alike, but ancillary expenses such as carry-on fees allow customers to save money by opting out.

"When ticket prices are high because of energy prices, being able to customize what you pay for, and only paying for what you use, becomes more important," he said. "The economic cost of a bag fee or another ancillary fee almost immediately segregates those who are willing to pay and those who aren't, those who see that value and those who don't."

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul


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