Tag Archive: Spirit Airlines


“Public scrutiny of business is constant and intense, and in the past decade, disillusionment has grown over excesses in executive pay, questionable accounting practices, drug recalls, and moral laxity on the part of corporations.” — Paul A. Argenti, Professor of Management and Corporate Communication at the Tuck School of Business at Dartmouth College

Should communication students be encouraged to work for publicly traded companies either from inside the corporation or providing external advice as a hired gun at public relations or advertising agency?

Or should these very same students be galvanized against the excesses of capitalism, demonstrating against Wall Street under the banner of social justice?

floodwallstreet

Are these questions mutually exclusive? Are you either for or against capitalism or for or against social justice?

These questions are magnified and intensified against the backdrop of underachieving employment, wage and real estate markets, while the NYSE and NASDAQ remain persistently bullish.

It appears this persistent economic scenario quite possibly will greet graduating students at least for the next academic year or two.

Examples of Corporate Excess

Finding examples of corporate excess is relatively easy.

Almost DailyBrett has joined the scads of other bloggers that take issue with seemingly brain-dead or just plain greedy antics by the leadership of large-cap publicly traded companies:

  • The author’s former company, LSI Logic, provided a seven-or-eight figure Golden Parachute to former CEO Abhi Talwalkar as he drove the 33-year-old specialty semiconductor designer into the abyss.
  • Spirit Airlines famously stiffed a decorated 76-year old, dying of cancer Marine veteran asking for a mere $197 refund, telling him literally to pound sand because he didn’t buy trip insurance. The carrier generously offered a partial credit, if he succumbed to the Grim Reaper before his flight.
  • October is right around the corner and that means (drum roll) even more corporate efforts to tie marketing bonanzas to Breast Cancer Awareness Month. Both 5-hour ENERGY and “Buckets for the Cure” KFC have become global leaders when it comes to “Pink Washing.”
  • Largest corporate bankruptcy-ever, Enron, is the poster-child when it comes to corporate greed and wrongdoing. And yet there were innocent people who were just trying to do their job, including telling the corporate story, until they realized they too were being misled.

Considering these examples and literally hundreds more, it is easy to give a broad-sweeping thumbs-down to multi-national corporations. At the same time, it should be remembered that these companies make the products and provide the services that we use on a daily basis (e.g., Apple = Macs, iPads, iPhones, iPods). They hire and provide benefits to literally tens of thousands (e.g., Boeing, 168,400; Starbucks, 160,000; Amazon, 88,400; Nordstrom, 58,140), Microsoft, 55,455). They provide wealth-accumulation prospects for the 54 percent of Americans who buy stocks, mutual funds and bonds (e.g., America’s investor class), including 73 percent of college graduates, and 83 percent of post-graduates.

Profit Motive

One of the major beefs espoused by the Occupy Wall Street movement three years ago, and the Flood Wall Street demonstrators earlier this month, is that publicly traded companies are focused on profits. These statements are accurate, but it should also be pointed out that companies have a legal (e.g., Employee Retirement Income Security Act or ERISA 1974) and moral (e.g., Fiduciary) obligation to produce the best bottom-line return possible for shareholders. Failure to do so invites almost certain civil and possible criminal litigation against the companies and potential dismissal of C-level executives.

floodwallstreet1

As a master’s degree candidate four years ago at the University of Oregon, the author of Almost DailyBrett noted the unrestrained celebration of competitive advantage and buy low/sell high mantra at the business school, and the unrestrained embrace of social justice including redistribution of income at the journalism school.

It seemed that one would build a statue of Adam Smith, while the other would throw flowers at the feet of Che Guevara. One would urge students to work and advise corporate America and the other would implore becoming an activist, marching, demonstrating and hopefully not being arrested.

Which is the better option for graduating students in making corporate America, particularly fallible publicly traded companies, more responsive to communities, the environment and let’s not forget, its own employees?

Corporate Social Responsibility

Corporate social responsibility or CSR should not be seen as an oxymoron. The concept of doing good (CSR) should not be viewed as contradictory to doing well (fiduciary responsibility). Graduates of communications, journalism and business schools can and should emphasize the value of doing BOTH to improve the bottom line for investors, including employees, while doing good deeds for communities, the planet and the rank-and-file employees.

Certainly the likes of Occupy Wall Street, which never found a unifying message, and Flood Wall Street, which tied capitalism to climate change, have their First Amendment Rights to (preferably) peacefully demonstrate. These NGOs need trained communicators and message developers.

Conversely, graduates could also choose to work internally to make companies better. They can stand for both fiduciary and corporate social responsibility. They can advocate against excessive C-level compensation. They can take stands against Pink Washing and Green Washing. They can ensure that the public is provided with good products at fair prices and everyone is treated with dignity and respect.

And heaven forbid, if another Enron is in the offing, they can courageouly tell the uncomfortable truth using their communication skills.

Is it better to be inside the corporation under the banner of capitalism or out in the streets (or in tents) calling for social justice?

There is more than one way to make corporate America better for everyone.

http://exec.tuck.dartmouth.edu/about-us/faculty/paul-argenti

http://www.huffingtonpost.com/2014/09/22/flood-wall-street-arrests_n_5865468.html

http://nypost.com/2014/09/22/climate-change-protesters-flood-wall-street/

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

https://almostdailybrett.wordpress.com/2012/05/06/lessons-from-the-spirit-airlines-pr-debacle/

https://almostdailybrett.wordpress.com/2012/05/02/evil-spirit-airlines/

https://almostdailybrett.wordpress.com/2013/10/10/5-hour-pink-washing/

https://almostdailybrett.wordpress.com/2014/05/22/shameless-5-hour-energy/

https://almostdailybrett.wordpress.com/2012/10/11/buckets-for-the-cure/

https://almostdailybrett.wordpress.com/2013/02/08/what-would-you-do-if-you-were-enrons-pr-chief/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

https://almostdailybrett.wordpress.com/2011/06/03/adam-smith-vs-che%e2%80%99-guevera/

 

 

At the risk of beating a brain-dead airline management team to death, it is instructive to review last week’s Spirit Airlines FUBAR and see what lessons we can learn.

Before we wallow in Miramar, Florida carrier’s deep doo-doo in what should have been a great week as evidenced Tuesday by the company’s strong $23.8 million Q1 bottom line results, let’s acknowledge that the company finally kicking and screaming came to the right decision about Refundgate.

After a full-week of playing Scrooge by telling a 76-year-old cancer stricken ex-Marine to essentially pound sand over a $197 airfare refund request, Spirit Airlines CEO B. Ben Baldanza issued a mea culpa statement late Friday afternoon.

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Friday’s bipolar 180-degree reversal of field came exactly one day after Baldanza told Fox News in a phoner that stiffed vet Jerry Meekins should have purchased trip insurance and therefore it would be unfair to those who bought this protection to make an exception for cancer-stricken veteran. In addition, the chief executive said that Spirit’s industry “leadership” in consumer complaints was “irrelevant.”

Twenty-four hours later, Baldanza admitted that “mistakes” were made and acknowledged the “medical condition” and “service to his country” by Meekins of Clearwater, Florida. Deep pockets Baldanza personally refunded the $197 to Meekins (even though the hosts of Fox & Friends had already beat him to the punch two days earlier on national television). In addition, he announced the company is donating $50,000 (genuine CSR?) to Meekins’ favorite charity, Wounded Warriors.

Is this sad public relations failure over? Not a chance.

Consider that Spirit Airlines issued the long-awaited statement at 4:31 pm EDT on a Friday afternoon, not right at the close of market but one-half hour later. The statement was clearly not timed for market close (the news release distribution services can specifically calibrate releases for 4:01 pm EDT), but instead just to get the statement out.

The problem is Fridays are the day of the week that Machiavellian PR pros typically use to bury bad news at the onset of a weekend. They particularly like to target Fridays before three-day holiday weekends (the Friday after Thanksgiving is particularly good) for bad-news burials.

Spirit Airlines’ late Friday afternoon (finally good) news release undoubtedly missed many leaving for the weekend, including conceivably thousands of Spirit employees. As a result, those boycotting the airline on Facebook just kept-on, keeping-on. The number of Facebook “likes” grew to 40,861 by Sunday morning and the related comments reached 33,199. In addition, there is a new Facebook site, “Spirit Ceo Ben Baldanza Must Resign,” complete with a doctored photo of Baldanza with Hitler’s mustache. There are 1,475 “likes” for this page.

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Legendary basketball coach John Wooden advised his players to, “Be quick, but don’t hurry.”  Spirit Airlines should have held the release until Monday immediately before the opening of US markets (a good news release day), guaranteeing better play. The release also should have included the announcement of the results of a Spirit Airlines refund policy review. Without it, customers, reporters, analysts, employees and other target publics will still ask if the refund change of heart only applies to Meekins. Will every other flyer still be stonewalled when it comes to asking for a refund, regardless of the circumstances? Did the airline learn anything when it comes to this easily avoidable PR train wreck?

There clearly needs to be a review process with a supervisor(s) given the common sense authority to issue a refund for extraordinary circumstances (e.g., Meekins cancer and doctor’s orders not to fly). The airline needs to drop its ridiculous policy of offering a “partial” refund if a ticket holder dies before or during a Spirit Airlines flight: “We are sorry that you died, so here is half-of-your fare back…We will keep the rest in your memory.”

This may also be a great time to buy some public relations goodwill by rescinding Thursday’s announced more than doubling of its swell fee to lift your own carry-on bag into the overhead bin from $45 to $100. Here’s a hint to the low-IQ management at low-fare Spirit Airlines: your low-fare competitor, Southwest Airlines, doesn’t charge for checked bags and likely will never charge their customers to hoist their own bags into the overhead bin.

Wonder if this crisis communications fire drill dies down by June 13 or whether it spills over to Spirit Airlines (Nasdaq: SAVE) annual meeting of shareholders that day at the swanky Ritz Carlton in toasty Phoenix, Arizona. The third item on the proxy is Baldanza’s $1,092,544 in annual compensation, including his 455,838 shares of SAVE.

Hey Ben, can you spare a dying vet a dime?

http://www.foxnews.com/us/2012/05/04/spirit-caves-airline-boss-refunds-dying-vet-fare/

https://www.facebook.com/SpiritCEOmustGO

http://ir.spirit.com/releases.cfm?ReleasesType=

http://www.foxnews.com/us/2012/05/03/spirit-airlines-outpaces-competitors-regarding-passenger-complaints-statistics/

http://files.shareholder.com/downloads/ABEA-5PAQQ9/0x0xS1498710-12-17/1498710/filing.pdf

Former Republican Governor of Arkansas, Mike Huckabee, is not exactly an Occupy Wall Street kind of guy.

If you talked to the honorable governor, he would certainly declare his unfettered support for capitalism and free-and-fair global markets.

So it is tad notable to hear the governor on his syndicated radio show Wednesday morning blasting (putting it mildly) Spirit Airlines for being ruthless, resolute and stubborn over a measly $197, and causing literally millions of dollars of damage to the 48-year-old airline’s reputation and brand.

If you have not already heard this pathetic story, a 76-year-old ex-Vietnam War Marine, Jerry Meekins, paid $197 for a roundtrip ticket from Clearwater, Florida to Atlantic City, NJ to see his daughter after her surgery. Meekins’ cardinal sin was that he did not purchase trip insurance.

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Two weeks later, Meekins’ found out that he has terminal esophageal cancer and his doctor ordered him not to fly. He asked for a refund from Spirit. No dice. Non-refundable tickets are non-refundable tickets. The Spirit lawyers did not want to set a “dangerous precedent” by allowing a terminally ill vet with a bonafied doctor’s note from being refunded the gigantic sum of $197.

In “defense” of Spirit Airlines, they offered him a $197 credit for a future flight.

Hello Spirit Airlines. Is anyone home?

The man is dying. He has no future. His oncologist told him that he can’t fly…and you are offering him a $197 future flight credit?

They also promised a “partial” refund, if he passed before or during the flight. What will a deceased person do with his or her partial refund? I am not making this up.

Checking out Spirit’s website (NASDAQ: SAVE), we learned just yesterday that the airline earned $23.8 million in the first quarter, causing the stock to advance nearly 5 percent to $24.11 in today’s trading. And the airline that makes a nearly $24 million quarterly profit can’t refund $197 (a rounding error) to a dying man, who served his country?

Meekins was a guest on “Fox & Friends” Wednesday morning complete with on-air graphics: “Mean Spirit’ed,” “Spiritually Inept” and “A Plane Shame.” Veterans have organized a “Boycott Spirit Airlines” Facebook page with nearly 20,000 “likes” and counting. Spirit’s brand and reputation are being permanently mauled in cyberspace and conventional media right before our very eyes, even prompting Governor Huckabee to implore the company to practice some basic public relations.

Meekins even suggested this morning on national television that Spirit should take appeals to its non-refundable ticket policy on a case-by-case basis. Seems like the ex-Marine has more public relations sense than the Miramar, Florida airline.

What has happened is that Spirit Airlines for being so obstinate and doctrinaire has generated a self-inflicted crisis communications drill. If the airline’s chief executive officer, Ben Baldanza, will not overrule his flat-earth lawyers, then Misty Pinson, the airline’s director of Corporate Communications needs to resign sending yet another message to management, and at the same time protecting her own reputation and brand. Remember: the most important public relations are personal public relations.

Dropping the hydrogen bomb on an employer should only be used in extreme cases, particularly in our long-term depressed economy. I opine that this incredible caper constitutes an extreme case. By staying, Ms. Pinson runs the risk of being permanently labeled in the PR Community as being the overseer of the Spirit Airlines PR debacle.

spirit

There is a growing trend for perspective employers to ask job candidates if there was ever a time that she or he considered resigning from a job because of moral or ethical concerns. This is a tricky question and it was posed to me.

I responded in the affirmative because it was the truth. My employer for 10 years was about to lay off 600 employees on September 12, 2001. As we all know, something very significant occurred on September 11, 2001. I wrote about this close call in Almost DailyBrett’s “Going to the Mat?” Fortunately, our management made the correct decision and postponed the 8 percent Reduction in Force (RIF) for a week. Whew.

There are times when the lawyers dig in their heels, arguing legal perfection to management. Sometimes these evil spirits win the battle, while a company’s reputation and brand lose the PR war.

Thursday update: Spirit CEO Ben Baldanza dismissed as “irrelevant” statistics showing that Spirit has the highest rate of customer complaints, and blamed cancer victim Jerry Meekins for not buying insurance. Meanwhile, the number of “likes” on the Boycott Spirit Airlines Facebook page now exceeds 26,000. The number of “likes” was 700 just 48 hours ago.

http://www.foxnews.com/us/2012/05/02/vietnam-veteran-overwhelmed-with-support-after-denial-refund-by-spirit-airlines/

https://www.facebook.com/Boycottspirit

http://www.foxnews.com/us/2012/05/03/spirit-airlines-outpaces-competitors-regarding-passenger-complaints-statistics/

http://finance.yahoo.com/blogs/the-exchange/spirit-airlines-dying-flyer-not-getting-money-back-160001321.html

https://almostdailybrett.wordpress.com/2011/02/16/going-to-the-mat/

http://www.mikehuckabee.com/

http://rebeccamurtagh.com/how-spirit-airlines-could-remedy-negative-pr-social-media-brand-backlash/?utm_source=rss&utm_medium=rss&utm_campaign=how-spirit-airlines-could-remedy-negative-pr-social-media-brand-backlash

http://www.foxnews.com/opinion/2012/05/01/spirit-airlines-refusal-to-refund-vet-ticket-earns-it-f-in-public-relations/

http://www.bestweekever.tv/2012-04-26/spirit-airlines-refuses-to-give-refund-to-clearly-selfish-veteran-dying-of-cancer/

http://files.shareholder.com/downloads/ABEA-5PAQQ9/1842975577x0x564674/c03bf692-5432-44d4-afd9-eb4ecb293fe3/SAVE_News_2012_5_1_General_Releases.pdf

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