Chicago Booth Review Podcast Meet the Man Who Gave America No-Frills Air Travel

Hal Weitzman: In the 1960s and 1970s, flying was a pretty luxurious way to travel. Not today, at least not for most of us. Ben Baldanza is a big reason for that. Baldanza was the CEO of Spirit Airlines from 2006 to 2016, and he transformed it into a ultra low-cost carrier, abandoning all frills and charging for any extras. He got rid of business class so he could cram in more seats. Spirit was the first U.S. airline to charge passengers for carry-on bags. The company sold ads on the overhead bins and the tray tables— even on the side of the aircraft.

In financial terms, it worked a treat. When Baldanza took the helm, Spirit was losing almost $80m a year. By the time he finished, it was earning a profit of more than $315m a year.

Welcome to the Chicago Booth Review podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I’m Hal Weitzman.

It was in 2015, the final year of his tenure, that Baldanza offered to come to Booth to debate John Paul Rollert, one of our adjunct professors. Rollert had just written a piece for the New Republic, which appeared under the headline, “A business school professor studies the world's worst airline.” Baldanza, proud of his record, was keen to push back on Rollert in public. The moderator for their conversation was Eric Zorn, who was a columnist for the Chicago Tribune at the time, and who had written a column titled, “True Confession: I Do Not Hate Spirit Airlines.”

The first voice you’ll hear will be Eric Zorn’s.

Eric Zorn: The only actually annoying part of our recent round trip flight between Chicago and New Orleans on Spirit Airlines was when, just prior to take off, the captain suggested we sit back, relax and enjoy the flight. First, you can’t sit back on a Spirit flight. (audience member laughing) The discount carrier got rid of reclining seats in 2009, the replacement seats are lighter, cheaper to maintain, and make it possible for Spirit to jam a few extra seats into the cabin. Second, it’s hard to relax on a Spirit flight, passenger leg room is 28 inches, the shortest in the industry, so even if you’re shorter than I am, and I’m six feet four, you feel rigidly shoehorned into a confined space. Finally, enjoyment isn’t the point of a Spirit flight. The point is to fly from point to point as cheaply as possible, enjoyment comes later when you get to spend the money that you have saved. And then toward the end of the column, I say, I admire the fairness of the a la carte unbundling of air travel costs, bags don’t fly “free” on other airlines, snacks, and water, and in-flight entertainment systems aren’t free, space in the overhead bins isn’t free, never was. Other airlines simply pass those general costs along in their ticket prices. And the days are long gone when I expect or even want to be pampered, fussed over, entertained and fed on domestic flights. Comfort may not be overrated, but it certainly is overpriced. To my right is Ben Baldanza, he’s the President and CEO of Spirit Airlines. Prior to joining Spirit in 2005, he served as Senior Vice President of Marketing and Planning at US Airways, and he holds a bachelor of arts degree in economics from Syracuse University, and a master of public affairs, specializing in transportation and economics from Princeton University. John Paul Rollert, on my left, teaches Ethics in Business here at Booth. His research focuses on the moral consequences of capitalism. He’s a graduate of Harvard College, earned his JD from Yale Law School, and MA from the Committee on Social Thought at the University of Chicago. The real reason that he is here, however, is that in April in The New Republic, he published an article titled “Flying Spirit, the Worst Airline in America.” (Ben chuckling) We are going to begin with some opening statements, and we’ll have some conversation. I’m going to try to keep the conversation going, and then we’ll conclude with maybe 15, 20 minutes of questions from the audience. So because Mr. Rollert has thrown down the gauntlet, I’m going to ask him to go first with an opening statement. So tell us why Spirit is the worst airline in America.

John Paul Rollert: I think business schools at their very best are both kind of laboratories, and temples of capitalism. What do I mean by that? The people that we send out, right, those of you who are receiving your MBAs right now become both evangelists for capitalism by your actions and your words, as well as the face of capitalism, what people identify with it. And I think that was the way I’d like to kind of think about this broader discussion, because a lot of, I think, what we’ll be discussing today as I see it, is a kind of contest over capitalism. When we consider the practices of Spirit, we’ll discuss the business model, the approach to customer service. Is that consistent with capitalism as you understand it? Is it an aberrancy? And does it ultimately reflect you capitalists, or the capitalists you will one day be? Those are the kinds of ideas I’d like you to keep in mind as we go through this. Now, Eric said a little bit about how this came about. In the fall, in order to teach Ethics of Business, I was commuting back and forth between New York and Chicago, and I was using exclusively Spirit Airlines. The timing was tremendously convenient. I was flying on the university’s dime, and by 10$ each way, it was cheaper than Southwest. And also the reaction that I got to flying Spirit Airlines from my friends, which we’ll get into a little bit later, was such that I thought, particularly as someone who teaches business ethics, this was worth doing. So in the fall, I ended up flying Spirit 13 times, and I wrote a pretty tough article maybe, to put it lightly in The New Republic. And if you doubt that, a slightly extended version is in “Capital Ideas”, which you’ll find on each chair, and so you can look at it yourself. (laughing) After I wrote it, in about two hours, Ben was kind enough and wrote me a lovely email and invited me to kind of have a general discussion.

Eric Zorn: A lovely email. (laughing)

John Paul Rollert: Lovely email, not as aggressive as I might be, were I in his position, and he suggested we have a discussion like this. And what better place to have that kind of a discussion than Booth. Now, in answer to Eric’s question, for me, what I argue in the article and what I’ll be talking about here is that there are two centers of gravity in capitalism that orient customer service, how you think about the customer. The first is the customer is always right, and in order to kind of create a loyal customer who’s connected to your business, you want to generate that strong sense of loyalty. The second orientation toward a customer, classically in customer service in capitalism is caveat emptor, or buyer beware. And the logic of that approach is that taking advantage of the ignorance and necessity of your customer is not only permissible, in fact it occasionally becomes standard operating procedure. I argue in the article from my own experience and what I’ve seen, that the legacy of Spirit, which I think is the most important airlines flying today in terms of setting trends in the airline industry, is that it’s becoming a center of moral gravity for this second approach of caveat emptor. From my standpoint, looking across the policies, they seem to often eccentric, opaque, or simply indecipherable, and the practices themselves shabby, shady, and occasionally scandalous. Now these are very strong claims and they make for a very sorry welcome to Booth, but hopefully they make for a great debate.

Eric Zorn: All right, shabby, scandalous, shady, Ben. (audience laughing)

Ben Baldanza: Thank you all for being here, and thanks to Booth for hosting this and Professor Rollert, appreciate it, and Eric, greatly appreciate you sitting in the middle of us here. (John Paul laughing)

Eric Zorn: Someone’s got to be.

Ben Baldanza: Caveat emptor means a couple of things, it means buyer beware, and what you really need to beware of is other airlines who charge you ridiculous fares for things you may not even care about. So we’ve got a couple of slides here that talk about what Spirit really is, Spirit who has the smartest customers in the business, and who think of their customers as the smartest people in the world. Because we are different, we are the first ultra-low cost carrier by design, we’re different by design, and all of our differences are about saving our customers money. We go to sleep at night saying, “How do we save you all money?” So you can pay back your loans. (laughing) We think about the world this way, when you ask customers what they care about, they care about price more than any single thing when choosing their airline. That doesn’t mean they don’t want leg room, that doesn’t mean they don’t want a free bottle of water, it doesn’t mean they don’t want to earn frequent flyer miles, but economists call airlines an intermediate good. An Intermediate good is the kind of good you consume as a means to something else. People aren’t on airplanes because they want to be in the airplane, they want to be at their meeting, they want to be at grandma’s house, they want to be on vacation, wherever they want to be. And so we’ve decided to dedicate our airline to service that big yellow bar, customers who pay for tickets themselves and worry about how much money am I going to have when I land, not what is my experience in the two to three hours I’m on the airplane. So we do this in a couple of ways. First of all, we have the lowest costs in the industry, and there’s a really outdated narrative in the United States that there’s big legacy airlines like United and American, and there’s low-cost carriers like Southwest and Jet Blue, but they’re not low cost at all. They’re actually quite expensive to travel. In fact, yesterday we flew through Columbus and a gentleman who lives in Columbus had come down to visit us. And he paid $600 round trip from Columbus to Fort Lauderdale, and he had bought the tickets six months earlier, I mean, six weeks earlier, $600. I don’t know that we’ve ever charged a fair that high. But anyway, so our costs are really low. Secondly, our lowest total price is low. Customers who fly Spirit pay less than they pay on other airlines. I’m not telling you that you couldn’t go to the Spirit website and create a total price that’s higher than Southwest or American, you certainly could, but what customers actually do, the number of bags they actually choose to check, the amount of water or Coca-Cola they choose to buy on board, whether they choose to pick where they sit on the plane or not, ends up being a total price that is in every route we fly less than our next best competitor. And if you look at our price plus bags, fees, and seat fees, which are the two largest things that we charge for other than the ticket, our total price is about $106. Southwest is 150, jet Blue’s hundred 153, and the big guys are between 160 and 200 bucks. And so we think that this approach creates an enormous win-win win. This is a fairly complicated chart. The black line across is the average fair total price that Spirit collects, not the ticket price, the total price for the ticket, plus all the extras that we charge for. And if you look at that price, no other airline in the U.S. can even make money at that price. If Southwest were to match our price, for example, they would give up all of their profits and a little more, and then to actually make us lose money, they’d have to get about a negative 20 percent margin. Jet Blue would have to lose all their profits, cut their fairs another 20 percent, they’re about an 8 percent margin company, so they’d become a minus 12 percent margin company, so they can’t match our fares. And the big guys aren’t even in the same business we are, they’re trying to attract customers not who pay for tickets themselves, but who have their corporation buying their ticket for them. And therefore they do all kinds of things to attract them, to choose me American, instead of you United, or me Delta, instead of you American. So they put fewer seats in the planes, and they put business class cabins, and lounges in the airport, and give you frequent flier miles, but they charge you for all that. So the last slide here, and this is the last slide I’ll show, really shows just how different we are. What the bottom scale of this chart shows is it takes all ticket prices in the United States and groups them into five quintiles, the lowest 20 percent of fares in the United States, all the way up to the highest 20 percent of fares in the United States. Then it maps the traffic that airlines carry and the yellow bars, of course are Spirit. And you can see that over 80 percent of our customers, that we carry, are paying in the range of the lowest 20 percent of fare in the United States and the rest of the industry, American, United, Delta, Southwest, they are now 85 percent of all the traffic in the United States, those four carriers. They carry less than 20 percent of their traffic in that bucket. What they’re really trying to do is charge you more the 20-40 to 40-60, the 60-80, the 80-100, to cover their absolutely bloated cost structures, which they incur because they’re trying to make sure the customer is always right, and give them everything the customer says they want, even if the customer is not willing to pay for it. So that’s the basis of Spirit, our customers are brilliant, and that’s why we have lots of repeat custom-ers.

Eric Zorn: Before, I’m going to get John Paul to respond to what you just said, but Airline Weekly ranking, released in January showed Spirit is the most profitable carrier in North America, an 18 percent profit margin. UAL had a 6 percent margin, and it’s the second most profitable airline in the world. So you guys are making money too, you’re not passing all these savings along to your customers, are you?

Ben Baldanza: But that’s why we call it a win-win win because investors win. (audience laughing) Well look it, if you had bought the Spirit IPO in 2011, you’d have paid $12, today you could sell that stock for $65. That’s a pretty good return for investors over three and a half years. So our investors win. Our employees win, because they work for a stable growing company, they can get promoted, they can earn fair pay for a hard day’s work. First officers can become captains, they can manage their life well, and most of all our customers win because they pay a lower total price. So investors win, employees win, and customers win, and every corporation has at least those three constituents that they have to serve, their investors, their employees, and their customers. And I think at Spirit we do an awesome job at all three.

Eric Zorn: Let me ask you to elaborate on, and you can respond to anything you want, but I want to specifically for you to elaborate on the sort of final charge that you lob, which is that their economic model is opaque, shabby, shady, and scandalous. What did you mean by that? And then if you would engage with what he’d said about the cost issue.

John Paul Rollert: Sure, sure. So the interesting thing, so Ben says that the passengers of Spirit are the smartest in the industry. They also are the most disgruntled, and statistics consistently show that, let me give you a few. So consumer reports, when it did its first assessment of the airline industry two years ago, found Spirit ranking at the very bottom, receiving one of the lowest overall scores for any company we’ve ever rated. And it’s important to know this is overall satisfaction. So you’re saying how satisfied were you without any specifics whatsoever, not limited to the factors of the survey, cause you could break it down. One of the lowest they’ve ever received, now among the highest, number two is actually Southwest, not an ultra-low cost carrier, but a low cost carrier. Spirit is the only two star airline based in the United States, according to Sky Tracks, an airline travel consultancy. What other two star carriers do you have? You have such carriers as Yemenia, the national airlines of Yemen, and Syria Airlines, and a third airlines from Indonesia, which was de-listed last year for not paying its pilots for three full months. What makes for a two-star airlines? A two star rating normally signifies a poor standard of product, and or poor or inconsistent standards of staff service delivery in the onboard or airport environment. Most stunning to me is Department of Transportation airline complaints between 2009-2013, passengers on Spirit were nearly three times as likely to go to the trouble of filing a complaint with the Department of Transportation on passengers as any other airlines. The number two airlines has only 1/3 the number of complaints, and the most remarkable thing is that between 2009-2013, the volume of complaints grew each year, which to me is tremendously stunning. So now why might that in fact be the case? And I think one thing Ben says about Spirit to me washes, right? And this is about kind of the bargain opportunity they afford you. I think, to some extent, it’s a misnomer to suggest that they offer a flight that’s in any way consistent with the experience most of you have had who have not flown Spirit, right. If you’re using Spirit as a commuter vehicle, you’re getting to point A to point B, and you need to take nothing with you, right? Because you’re only allowed a good that is the size, according to the website, of a laptop or a purse. that I don’t know how many of you have traveled carrying goods that only fit in a laptop or a purse, Spirit works well. It’s like a public bus in that way, and it functions well. And it is at the margins a little bit cheaper. Now I actually went through last night and looked at different fairs. I’m a bargain hunter myself, looked through five flights from Chicago to Atlanta, Chicago, to New York City, Chicago to LA, Chicago to Boston, Chicago to Miami. In two of those cases, Spirit was actually cheaper than anything afforded by either Kayak or Southwest. It saved you $6 between Chicago and New York City, and $21 between Chicago and Boston. However, to a certain extent, this is an apples to oranges comparison because in any other airlines you at least get a carry-on bag. You factor in a carry-on bag, which tends to be the very least you can ask for when you’re traveling anywhere. And Spirit is actually not cheaper on any of these flights. It’s between $14 more expensive to $64 more expensive. And if you do an apples to apples comparison with Southwest in each of these cases, it’s between $139 more expensive, and $239 more expensive. Now, why then would that actually end up frustrating people a great deal? Well, the fact is it’s, as far as I can see it, Ben, in 2013, in April, described his travelers as follows they’re discretionary travelers, they’re not corporate business travelers who got to make the trip to close the sale, or to fix a problem. There are people who are generally taking the trip to see family or friends, or do something that on average is an enjoyable part of their life to do. So we get these customers when they want to be in a good mood about their travel. What I suggest to you that this also means is that they’re the kind of traveler who does not fly very much every year. 73 percent of Americans fly one-time or less each year, and I think, I actually don’t have it down here, 89 percent of Americans fly only two or three times each year. They’re not remotely as accustomed to flying as all of you are, who fly into Booth each and every weekend. Well, what does that mean? When they’re flying they have at best a kind of rough, customary understanding of what a flight involves. They see a ticket, they buy it, and then after time they realize what they get. Now, of course in the airline industry, you get 24 hours to cancel your ticket, although I would note Spirit, in I believe 2012, after this regulation was brought in launched a court case, which was ultimately thrown out by the DC Circuit to try to erase that. And why is that the case? Once you have someone on the hook and they’ve put that money down, you’ve got them. And then what do you do? Well, if you look at Spirit, I actually don’t know if this factoid was here, but I think it was last year about, let me get it right here, 40 percent of Spirit’s revenue is non-ticket revenue, right. That’s extraordinary. Ryan Air, which many of you are familiar with which to some extent is the inspiration for Spirit, in Europe, a very similar business model, only 25 percent of their revenue is non-ticket, right. That means this is revenue that you are paying beyond your ticket. And once you have bought the ticket on Spirit, everything else you’re buying makes the ticket more, and more, and more expensive. I’ll give you two examples of the kinds of things that I think frustrate people. The first is I would suggest an example of a customary expectation being taken advantage of. When you fly these days how many of you use e-tickets? Right, you get it on your phone, and you swipe through. Basically everyone. This is not available on Spirit. This to me was the most remarkable thing you expect to get an e-ticket, not available. So then you have the expectation that you could just print it out when you get to the airport. You can, Spirit will charge you $10 to do that. If you are a, I would say, fixed-income or low-income person, you’re probably finding this out just the day before, right, maybe earlier. You don’t actually have a printer at hand, the price is low enough. you’re willing to pay out an extra $10. But the idea that you buy a ticket on an airlines and you actually don’t get the ticket to me is absurd. That’s one example of kind of customary expectations being taken advantage of. The more remarkable to me, and the funnier of the two, can I actually get, Craig, the slides? So I’ll talk a little bit here about Spirits Miles Program, which to me is a great example of the kind of bait and pull. So when you fly Spirit Airlines, at the very end of the flight, the stewardesses, or the flight attendants come through, and they say, if you fly Spirit Airlines with only 2,500 miles you get a free flight. Now I pay close attention to these things, being the bargain hunter I am. This is a look at my Spirit profile page, and you can see each flight there. How many, raise your hand if you think I get 733 miles for each flight, according to what you see up there, right. I think that would be reasonable. So in October of last year, I could not understand this, that not withstanding the fact that by my kind of rough count, I should have about 4,500 miles. And so, because I have the wherewithal, the time, and the research interest, I ended up calling Spirit. It actually took two phone calls to get all this information. So I call Spirit, I get someone on the line and I say, “You know, I’m trying to figure out what’s going on here, because it seems like I should have 4,500 miles. Don’t don’t I get 733 miles for each flight?” The woman I was speaking to, a lovely woman said, “No, actually you get 366 miles.” And I said, “What do you mean? It says 733 on the webpage, how can I only get 366 miles?” And she said, “Well, you only get it under certain circumstances. If, for example, you have the Spirit Card, right.” So apparently the 766 is aspirational. And I said, “Okay, well, that seems to me questionable, since you say consistently it’s 733, but be that as it may, it still doesn’t, the math doesn’t make any sense. I only seem to have about 1400 miles even by your math, I should have 2200.” They said, “Well, actually in certain cases you don’t get the miles.” Can I have the next slide, please? You have to affirmatively go and request the miles. Now over two phone calls, it’s still actually not clear to me under what terms I have to request, particularly because Spirit actually has all of my flights listed. So what I have to do is I have to take the code, I have to put it in the box here, and I have to request the miles, and I’m not still clear under which circumstances I need to request them. So then I say to her, “well, how do I know? Because all of those flights that are listed there, it’s not clear to me which one you need to request for.” And she said, “well, we don’t tell you that.” (audience laughing) And I said, “So what you’re saying to me is I have to affirmatively go through for each flight and request those miles.” And she said, “Yes, that’s exactly what you have to do.” I will not even get into, for lack of time, what you actually have to do to redeem those miles. I will say that we’re now in, I believe, a five month blackout period where you cannot get your miles, your flight redeemed for 2,500 miles. It’s only, I believe in most cases, for 25,000 miles plus a $20 fee.

Eric Zorn: You’ve gotten a lot here, can we let Ben respond? (laughing)

John Paul Rollert: Sure, we’ll go, we’ll go.

Eric Zorn: But I’ve been looking forward to-

John Paul Rollert: So I guess, by way of question, do you think your miles policy is transparent?

Ben Baldanza: We get no complaints about it until this. So I would suggest that if any of you were in Dr. Rollert’s class, and you submitted an economic analysis like he just did, he would give you a D, or maybe even fail you, because it’s absolutely absurd what he is claiming. The fact is the Department of Transporta-tion, which collects money from all of us who pay taxes, tells you where people fly, and how much they pay, and how much they pay for their bags, and their seats, and everything. And the customers who fly Spirit, their tickets are generally 35-40 percent less than the other carrier, and their total price is about 25 percent less. I’m not saying that you can’t find examples where we may be more expensive because maybe our plane is full, and the other guy’s empty. I flew a flight out of Los Angeles last week to Fort Lauderdale. We had a 9:41 PM to Fort Lauderdale, Virgin America had a 10:00 PM, Jet Blue had a 10:05 PM. We had 178 seats on our plane, we were four oversold, so there were, every seat on that plane was full. Jet Blue had 150 seats, they had 82 people on their plane. Virgin America had 150 seats, they had 47 people on their plane. But everybody loves Virgin America, everybody loves Jet Blue because they’re wonderful, but why were more people on Spirit than on Jet Blue and Virgin combined? The answer is because they paid less money. Secondly, the idea of Spirit being opaque is absolutely absurd. Why in the heck would I be here If we were opaque. I’d be hiding somewhere. The reality is you go to our website, you can pick a man or a woman to undress for you to tell you how you can pack and not pay baggage fees on Spirit. And you can take a much larger bag than a laptop, that bag would go for free. That bag would go for free. 16 by 14 by 12, you can pack two nights of travel in that bag, and you can take it for free on Spirit, and our customers do it all the time. So the reality is we don’t prey on customers. The reason the 24 hour rule that we fought it, and still will win that, and by the way you didn’t give us credit for charging all customers with a $2 Department of Transportation, Unintended Consequences Fee, which goes on every one of our tickets as a result of that rule, is that airlines sell a spoilable product. When that door closes, we get no chance to sell that seat again. And when somebody can hold the seat out of inventory and then churn it, hold it another 24 hours, hold it another 24 hours, we lose all the ability to sell it. That costs the airline money, and that raises everybody’s fares, and Spirit will absolutely fight for customers to get the lowest possible fare. So look at real data, look at what people really do, not what you can create from the website. Look at what customers are really buying, Look at what customers are really repeating, and that’s where the core of really Spirit Airline is. All of you, when searching for truth, in whatever businesses or philanthropic efforts, or whatever you try to do. You probably know today, but you will learn over time, you don’t listen to anything people say, you just watch what they do. Behavior tells you everything. And the customers on Spirit behave in ways that saved them less money, they complain about us in the ways they think are important. We have two types of complaints at Spirit. We have service complaints, which is we’re late, we lost your bag, we spilled coffee on you, we were rude to you, right, things like that. Our service level complaints look just like everybody else’s in the industry. Our service level complaints are not higher than Southwest, or Jet Blue, or American, or anybody else. But we have a whole category of complaints that they don’t have, which are business model complaints. So we have customers who complain to us because why should I have to pay for my carry-on bag? Or why wouldn’t you pour me a drink of water on board when I needed to take my life affirming medicine. We get that complaint once in a while. Or why do you do things the way you do? And in that case, we don’t ignore those complaints, but what we say is “How do we better manage that customer’s expectation?” You know, someday I want to walk into a Chick-fil-A and look at the menu and just scream, “What do you mean you don’t tell hamburgers here?” Because you don’t fly Spirit for leg room, you don’t fly Spirit for a cushy seat, you fly Spirit to save money, and that’s why people fly us. They understand the frequent flyer rules, they understand the a la carte pricing, We explain the a la carte pricing ad nauseum to them. We almost have a Surgeon General’s warning on our website, “Make sure you know what you’re getting, go to Spirit.com, click the Spirit 101 League, watch the videos. And then tell me if you don’t understand how the model works.” You’re all clearly smart enough, our customers are smart enough. Real data doesn’t comport with what Dr. Rollert just said, emotion comports with that, but data do not.

Eric Zorn: Did you have a question for him that you wanted to? I mean, he can respond to that, or you have a question you want?

Ben Baldanza: I have one question. Would you like to tell a Haitian cab driver in South Florida who makes $20,000 a year, that he should pay more for his ticket, he should pay the $700 round trip that American used to charge when they were the only carrier from South Florida to Port-au-Prince. Now Spirit flies that route about $89, plus we charge you for a bag, shame on us, all right. But would you like to tell that driver who makes 25 grand a year, that he can’t go see his mom because he needs to pay more money so that he can check a free bag, or that he can get a free Coca-Cola, that is not ethical at all. Every customer who flies Spirit is filing a complaint against every other airline that their prices are too high. The government should track that complaint rate. (audience laughing)

Eric Zorn: It is, my anecdotal experiences is that Spirit flights are full. When we flew down to New Orleans and back, that thing, that plane was jammed both ways. And so people are voting with their feet, right? I mean, in terms of filling these airplanes.

John Paul Rollert: Sure, I think the question becomes what, for me at least, the moral significance of that is, right. Spirit is offering the lowest flight available, most of the time I would confess, although I would argue again, if you went to a restaurant and you ordered dinner and when dinner was served and you noticed the table was bare, and you said, “Wait a minute, I’m supposed to, how do I eat the spaghetti I ordered? There’s no napkin, there’s no utensils, there’s no plate,” and they said, “Well, you can purchase those.” “I ordered a $10 spaghetti dinner.” “Well, the napkin will be $2. The utensils will be $3, and the plate will be $15.” You would be outraged, and you would ask for your money back, and you’d feel that you have a right to get that. My problem is to the degree that you’re describing a situation where people feel consistently as though they’ve been taken advantage of. When you are a bargain hunter, and you feel like you’ve gotten a wrong deal, that deeply frustrates you.

Ben Baldanza: But why do you think that Spirit customers feel that way? They don’t.

John Paul Rollert: I would say, how else would you square all of the complaint data you receive?

Ben Baldanza: We can explain it in three ways. First of all, value is defined by price versus got, right. When you hear someone say “Value for the money,” you know they’re an idiot. That’s like saying Abe Lincoln was tall for his height, all right? (laughing) Value incorporates how much you pay for something. It’s what did you receive for the money you paid? That’s what value is. When consumer reports tells you about which toaster to buy, they say “This toaster costs $120, this one costs $70. This one burns the toast, this one toasts it nicely, buy this one, it’s a better value.” When they tell you about what airline to fly, they make an incredibly elitist view. They basically say “Every airline costs the same price, or everyone can afford anything they want.” Because what they tell you is “This airline has more comfortable seats,” or “This airline is more on time,” or “This airline has better frequent flyer programs.” They don’t tell you the value proposition customers choose Spirit every day. Our planes are in are hugely full because it’s the best value proposition they can take. The last thing I’ll say about complaints is our DOT complaint rate is three times higher, it absolutely is, we’ll own that. But let me ask you, say you run a restaurant and you serve 100,000 customers a year. It’s a really nice restaurant, a lot of people like it. Eight of those customers of the 100,000 come in complain to you and say, “I really don’t like your food.” Are you going to really change your restaurant? Are you going to say my menu is wrong? My service is wrong, when eight out of 100,000 tell you something’s wrong? That’s that’s what your tax dollars pay the government to report, that eight out of every 100,000 Spirit customers complained to them. It’s true that they complained at a rate of less than 2/100,000 for everybody else, so we are three times worse. The Empire State Building, I should say the Sears Tower, since we’re in Chicago, is a lot taller than me.

Eric Zorn: Willis Tower, excuse me.

Ben Baldanza: Oh, the Willis Tower. I’m sorry, that’s right. The Willis Tower is a lot taller than me, but if we’re measuring the distance from here to Mars, that’s really not that relevant.

Eric Zorn: Can you talk a little bit more about this moral question you’re talking about? I mean, what is, do you feel, I mean, I guess I feel like you look at Spirit’s website and when we first checked in we were looking at it to see, and it’s all there. And yeah, I mean, the example of a restaurant charging you extra for everything is true, but this restaurant, to use that analogy, these people are coming back to this restaurant and they’re paying for their plates, and they’re paying for their silverware, and their napkins. You’re talking about you’d get up and walk out, you probably would, probably wouldn’t go back, but they are coming back. So what is the moral dimension, if you can talk about that?

John Paul Rollert: So, I would give two examples. The first is one thing I was actually struck by looking over Spirit’s website over the last few days, is that it’s changed in, to me, surprising ways, even in the last couple of months. One of the things that was recently introduced, I believe in early April, was now, and this is a pricing structure that is more complex than bidding on courses for Booth, I think. There are five tier structure for how you pay for your carry on. So it used to be the case with a carry-on, that if you buy the carry-on when you purchase the ticket it’s one price, if you purchase it when you check in, it’s a second price. If you get to the airport, at this point, your carry-on before the gate is $55, if you make the big mistake, and when you sit at Spirit, you watch people do this. This kind of look of horror, that carry-on is 100$. Now there is actually a fifth price point, which is to say, when you actually buy your carry-on, when you get your ticket, and between when you check in there’s another pricing point, I think it goes from 50 to $55, I may be wrong on that. If you are spending an enormous amount of time, calling Spirit, going through the website, trying to figure all of these things out, yes, although I would suggest in cases like the miles example, I still can’t figure out what the program is. But do people typically have that kind of time and should they be expected to put out that time and to the degree that you are incentivizing making money off taking advantage of the ignorance and necessity of people, that to me is morally problematic. There is a lot of money to be made in world by figuring out what people expect and exploiting it as best you can consistent with the law.

Eric Zorn: Is there, is there-

Ben Baldanza: Which is exactly, by the way, what Southwest Airlines does every day. Because Southwest airlines lies to the world and says, “Bags fly free.” Bags aren’t free. You pay people to load the bags, you pay insurance costs to carry the bags, you burn fuel because of the weight of the bags. You pay the airport for bag systems to move the bags around. What Southwest does, it says “You’re paying for two bags, whether you check two bags or not.” And they make everybody on the plane buy two bags, that is morally reprehensible.

Eric Zorn: Well, let me ask you a question about these fees when you get to the airport, and you know, the extra, as you get closer to the gate, you pay more and more. Is there any degree to which you kind of count on people not being attentive, not showing it? So that you’re taking advantage, as Paul says, of people’s lack of attention? That this is part of your business strategy, that you know that a certain percentage of people are just not going to print out their boarding passes, or are not going to have printers at home.

Ben Baldanza: No, and in fact you can print a boarding pass for free at our airport, you just go to a kiosk and do it. You don’t need to have a printer. The charge for a boarding pass at the airport comes when you go to a human being and ask them to print your ticket for you. And the reason for that is because you’re choosing not to self-service, because you’re choosing not to check in on your own computer, or on the kiosk that we provide for you. You’re making us pay that employee, rent that space, and so you’re covering that cost. One of the realities of Spirit’s business model is we have this kind of contract with our customers. We say, if you behave in a way that is lowest cost for us, so you don’t carry many bags, you buy the ticket on our website, you check you self-service where you can, you buy early rather than later, all those things make it cheaper for us. When you do all those things, you don’t pay anything extra. If you choose to behave in ways that are more expensive for us, you buy us on Expedia, instead of on Spirit.com. You carry lots of bags, you bring the big bag to the gate, which delays our flight, and screws everybody on the plane because of your selfishness, right. When you do those things, we’re going to charge you for that. That $100 bag fee at the gate should probably be $1,000.

Unknown Speaker: Wow.

Ben Baldanza: It’s not a fee, it’s a fine. We don’t want it to happen. Why are speeding tickets expensive? If it cost you $2 to speed, there’d be no incentive not to speed. Speeding tickets are expensive because if you get caught, there’s a real consequences, you don’t want to do it, you don’t want to get caught, so you don’t speed as much. We don’t want people to check bags at the gate because it delays the flights.

Eric Zorn: This is the wrong town to talk about profits and parking, traffic, by the way.

Yeah. (laughing) I want to open this conversation up to questions from the audience, which will come after, but I want to give Paul a chance to respond to that.

John Paul Rollert: No, I mean, for me, so in Milton Friedman’s “Capitalism and Freedom,” which is a book that I assign in my class, he says “Competitive capitalism depends on exchanges that are voluntary and informed.” Voluntary, as well as informed. This is revelatory to me that you actually don’t have to pay $10 at the airport, because I’ve talked to a lot of people, I’ve looked at the website, honestly, you can’t figure these things out. So to the degree they change, your ability to be informed, the price for being informed can’t be stratospherically high, that then fundamentally undermines capitalism and the faith people have in the system.

Eric Zorn: I guess, so it seems to me your primary issue with them, is it transparency, or lack of transparency?

John Paul Rollert: I would say that’s probably the strongest claim I would make, yeah.

Eric Zorn: Okay, all right, there will be, I think I saw a hand go up for a question, right there. Go ahead.

Jake: Cool, My name’s Jake, I’m a second year MBA student, I’m graduating next week. Thank you so much for coming, I really appreciate it, and honestly, like, appreciate the courage because I know that most people hate Spirit. (audience laughing) So it’s good that you would come here.

Ben Baldanza: That’s not a true statement. (laughing)

Jake: Should we take a straw pole? I think Professor Rollert’s comment about kind of these two binary approaches to capitalism of buyer beware and the customer’s always right. I really don’t like the customer’s always right approach, but I think there’s a middle ground there, and I’ll get to what I think that is in just a second, but I think that, like there’s two issues that concern me about Spirit. And I think, it’s not, I love like the a la carte model. In fact, I’m like a very light traveler, and I love that I don’t have to subsidize people who are checking bags, so that’s great. I think the transparency is by far the biggest thing. And I think what a lot of kind of the slides, the Spirits slides to me are extremely disingenuous in that they’re reflecting the sticker price, but not the cost to the consumer. Because when I go to the airport, I don’t, there’s nothing on the website that says that the employees, that Spirit, if you’re talking about labor markets, if you’re going to pay people less, you’re going to get worse employees. The employees that Spirit has at the airport, they’re fewer, and they’re awful, quite frankly. And that my experience is going to be terrible at O’Hare. It’s literally a madhouse if you go to the Spirit gate, no idea what’s going on, there’s no one working there. And so that’s like, to me, the biggest issue of the ticket price does not in any way reflect the cost. And then the other issue is I think a lot of the kind of slides really left me feeling a little icky because they’re so disingenuous, and they might’ve flown over, like, but I don’t think anyone did, they’re not flying over, flying over anyone in this room’s head. Because like you said, you are at Booth. You’re comparing apples to oranges, right So when you’re comparing average sticker price, you don’t have first class tickets, right? So other airlines do, which skews average ticket price up. You’re talking about 8 out of 100,000, I didn’t even know that this complaint to the transportation department exists. So I mean, but why don’t we talk about how many complaints in a much lower friction place you get, which is to your website. So the question is the middle ground, the middle ground of Professor Eppley’s Middle Ground. Do you kind of, just because you can do something, do you think you should? Because I think that’s like the golden rule. That I wonder how you’d think about that.

Ben Baldanza: That’s a fair question, and I would push back a little bit. I think we’re extremely transparent, and there was nothing disingenuous in those slides. We showed you what customers actually do. We told you the total price they pay, not our ticket price versus the other airlines price. When we charge them for more things after the fact than others. we told you, we do total revenue divided by total customers. So that includes the bag revenue, the seat revenue, the others. So we weren’t disingenuous in those sides. Our planes are full because customers save money flying Spirit. I’m sorry you’ve had poor service at Chicago. One of our problems at Chicago, quite frankly, is that we’re packing a lot into just a couple of gates. And we have a meeting with your mayor next week to talk about how do we get a few more gates at Chicago. But the reality is the city of Chicago has responded fantastically to Spirit because they’re tired, quite frankly, of paying the ridiculous rates of American, and United, for getting not that much more. They get a little more, another two inches of leg room, a Coca-Cola, a bag of peanuts in some cases, but they don’t get a lot more, but they charge a lot more. So we are really jammed at O’Hare, and Concourse L where we operate at is really jammed. And we put our people under a lot of pressure there, and I’m sorry, you’ve had bad service there. But I’ll tell you, we compete for labor, just like we compete for everything. And we can’t pay our people less than the market allows us to pay them. And if we have huge turnover, that costs us, and we don’t have that kind of turnover. The people who work at Spirit work hard, they have a tough job, and we’re working to make it better everywhere we are. So our slides aren’t disingenuous. I hope you have a better experience at the airport next time you fly us, but you get what you pay for, don’t pay for things you don’t want.

John Paul Rollert: I think the question was probably more directed to, man, I mean I do think transparency is not synonymous with not legally fraudulent, right. That’s a different matter whether or not Spirit airlines is committing fraud. Although I would note that it has paid the largest civil penalty in Department of Transportation history in 2009 I believe, for fraudulent pricing practices in part, and two years later, in 2011, another $50,000 fine. So there are points at which it has clearly crossed the threshold of legality. But I think the important thing to hammer home again, is the idea that transparency is synonymous with not legally fraudulent is deeply problematic.

Eric Zorn: Yes, your question, please?

Roz: Hi, my name is Roz Bryant, I’m an evening student here, I’m not graduating yet. My question is about customers, and repeat customers. So do you have data that indicates that people are continuing to fly? Specific people are continuing to fly Spirit? Because I have a lot of evidence that people are flying once, having a bad experience, and not returning to the airline, including a personal experience where I put a teenage son on a flight home from boarding school, and was quite surprised at the experience he had.

Ben Baldanza: The answer is we do, and customers do repeat on Spirit at a very good rate. They join our loyalty programs, they renew in our loyalty programs. Our planes are very full, they’re more full the longer we fly. We would have run out of customers a long time ago between Chicago and Fort Myers if everyone was one and done, because we’ve been flying that route for 15 years and it’s jammed every day. So the reality is we do have a lot of repeat because most customers, now look, we’re in a business where there’s people, machines, and mother nature, things go wrong in the airline business. And there’s absolutely, you can have a bad experience on Spirit because of something that happened as a result of delays, or cancellations, and such. But on average, our flights are middle of the pack on time, our flight attendants are nice, generally. (laughing) The seats don’t recline, but nobody reclines on you either, and you pay a lower price. So most people don’t have the one and done experience on Spirit. Some of them do, but I can tell you, I worked at US airways, I worked at Continental, I worked at Northwest, and I worked at American, and I got one and done complaints all the time, and I got complaints all the time about how ridiculous my fares were. That’s one complaint we never get at Spirit.

Eric Zorn: Do you think there should be, a quick question from me, should there be more regulation to address some of your concerns about transparency and information? Should there be say standards on websites, and information, and so on, so the customers at least know what they’re getting?

John Paul Rollert: So this is gonna be the academic in me. I’m not a student of airline regulation, so I’m somewhat loath to comment. What I will say, is that for anyone who kind of is a believer in free markets to the degree that people feel as though they’re being taken advantage of, that they’re not getting the deal they signed up for, they’re going to ask government to regulate, and they have every good reason to do so.

Eric Zorn: Okay.

Ben Baldanza: What I was going to say is there’s a gentleman named Charlie Leocha, and Charlie runs a consumer travelers advocacy group. Charlie hates Spirit, but what Charlie has said to people is “As much as I hate Spirit, I want the industry to use Spirit’s website as a model for transparency, because they do a better job than any other airline explaining exactly what the value proposition is.”

Your question.

Tom: Mr. Baldanza, John Paul, thanks for being here, thanks for putting on the debate. It’s very entertaining. (group laughing) You mentioned Mr. Baldanza, that people checking bags at the gate is a major problem, hence the $100 fee. But I’m on Spirits website on my phone, checking out the baggage fees. There are different, as John Paul mentioned, different prices, depending on when you tell Spirit that you’re going to check a bag, and it varies quite a bit. If you tell them prior to purchasing your ticket, it’s on the order of $25 for the first bag. If you tell them when you are in the process of checking in, however, it jumps the price for some reason, it jumps to $55. Is that, does that increase in price accurately reflect the incremental cost to Spirit? It seems like if I check it at any time prior to the gate, it ought to be about the same.

Ben Baldanza: Well, pricing in anything doesn’t reflect incremental cost, except in a pure Microeconomics 101 class, price drives to to marginal cost, I get that. But the reality is is what you, what I think everybody sort of internalizes is that if you buy a ticket six weeks in advance, it’s less expensive than if you buy for the next day, or you buy on the same day. So if that’s true for the seat, why is it different for the bag? It’s the same spoilable product, there’s still a fixed size of the overhead bins, There’s a fixed size of the things underneath. When we know how many bags are coming, we can plan better. We can maybe even change the gauge of the airplane better. So I can’t tell you exactly that it is $20 or $26 more to tell me on day one, than on day 60 before the flight, I can’t tell you that, but I can tell you that economically the cost to the company goes up, and economically we reward people who plan in advance. And that’s the biggest point. Many of the charges that Spirit, many of the options that Spirit offers, that have a charge, act as economic incentives for customers to say, “I’m gonna find a way to save money.” You can fly other airlines, and there’s nothing you can do to lower your total price. It is what it is. At Spirit you can make conscious decisions to pack lighter, to self-service, to make other conscious decisions, to bring your own food. You can make those decisions, and positively save money doing that, and we think that that’s incredibly customer friendly. That’s not taking advantage of customers. That’s giving customers more pricing power. You decide what you want to pay for. And we’ll show you the ways to walk through this maze in the least expensive way for you, that’s what our website does.

Eric Zorn: I have a question, from back in the way back, standing up against the pillar. And I’ll leave you a chance, while we’re getting the microphone to him, for you to respond to that.

John Paul Rollert: Yeah, I mean, I think Tom’s question is more directed toward Ben. I mean, to me the problem is my, when I interpret fees like that, because you can’t back out of the ticket, you’re stuck. And the question is, will you walk away. Obviously the fee for the bag can’t be 1,000$, you’ll walk away. The fee has to be just enough for you to go to yourself “Oh, this is terrible. I’ll pay it.” But then you feel you’ve been taken advantage of, and that’s precisely the kind of feeling, penny wise, pound foolish. That to me is too consistent with my experience when you’re on Spirit.

Eric Zorn: Yep.

Audience Member: It’s pretty apparent to me, by what you’re saying, and how you’re presenting this, that your underlying customer service, the customer service that you’re providing to the everyday client is price, and after that kinda it’s up to us, we’re kind of in a we’re screwed, we’ve already paid the price, and that’s our customer service is the price. Nothing else, everything after that is a la carte. But do you, when you train the customer facing people, is that the attitude that you bring to them? Because that’s what it seemingly reflects down to the everyday customer.

Ben Baldanza: That’s a very good question, and training is important, and when we started sort of the rebranding of the airline about two years ago with an aim toward more transparency, that’s what the rebranding has all been based on is let customers understand the value proposition better. Because what you clearly see from our own internal data is customers who understand the model like us, and fly us a lot, and those frustrated by the model are the one and done-ers. So we don’t want that frustration. We train our customer service agents and our people who deal with customers directly, our flight attendants, and the airport people, in a service parameter we call SMILES, which is an acronym that stands for, each thing stands for something. And what we really do is train them to educate the customers, to help explain to customers why we charge bag fees, why it’s more expensive if you ask me to do it than if you just walk over to that kiosk and do it for free. So what we train them to do is to understand the model well enough, and internalize the model well enough so that they can educate the customers so that the customer can behave in ways to save them money. That’s what our training is all based on, beyond the sort of technical training of make sure you know how to actually check someone in.

Eric Zorn: Way over here, right, yes you right there, get the microphone. Do you do you have anything you want to add while we’re getting the microphone?

John Paul Rollert: No, no, I’d love to get in more questions if we can.

Eric Zorn: I know we’re a little bit pressed, we’re gonna try to wrap up right at 1:30, and I want to give these guys both the chance for some closing statements.

John Paul Rollert: Probably 1:25.

Eric Zorn: 1:25.

John Paul Rollert: Yeah, just so people can get to class.

Eric Zorn: All right, so we’re going to get some closing statements here really quickly, but go ahead.

Audience Member: Okay, well thank you so much for your time today. I think your website hits have gone, in the last 20 minutes. (panel laughing) My question is, could you talk about some specific initiatives that you’ve taken to change the perception of people who want the price, but have taken everything else for granted?

Ben Baldanza: Yeah, that’s a great question. And that’s a business school question too, right? Because a couple of years ago we were faced with this reality, that customers who knew the model and understood the model liked us, repeated on us, gave us high net promoter scores, and things like that. And the customers who didn’t were a complete opposite from that. So we said, how do we address this problem, as a business? So we’ve done a couple of things. We, for a long time, have been really an advocate of price transparen-cy. And we’ve taken that idea of price transparency, and say “Let’s apply that to the whole business model.” So we’ve changed massive parts of the website. Anyone who’s gone to the website during this debate is seeing a very different website than we would have had a year ago, that has spent a lot of time on education. That explains how you fly Spirit, how you save money on Spirit, how you pack lighter, things you can do to positively affect your ability to get a cheaper flight to where you’re going. We have done lots of education of our own employees, and we’ve changed our entire team member training around that effort to do things. We have worked with third-party sellers of Spirit, like Travelocity, and Orbitz, and Expedia, to work with us, to help share the education on our own website with their own customers, so that they are not, so that they don’t just see the low fare on Expedia and then get disappointed what they see on Spirit. So we’ve done all those things, and one thing I’ll tell you for sure is I’m not George W. Bush standing on the aircraft carrier saying “Mission accomplished,” right? We’ve got a lot more to do along every one of those, on every one of those parameters I mentioned. But I can tell you, you look at our Twitter responses, you look at our net promoter score, you look at the detail of our complaint data, you look at our repeat rate, and all of those things tell us that customers understand us more, customers understand the model more, customers are more feel better about the total value proposition on Spirit than just a couple of years ago. So we know the things we’re doing are working, but we clearly have to do a lot more.

Eric Zorn: Is this model of yours, is it applicable to other industries? Could like hotels start charging for hot water? And pillows, and all.

Ben Baldanza: It’s a good point, but the secret is that every other industry already does this. Right, you can go to McDonald’s or you can go to Morton’s, you’re gonna pay a different price, but you’re not going to expect the same thing. Marriott has JW Marriott, they have Fairfield Inns, they have Courtyard. They have all different products for different price points, and they give customers different things for different rates. The idea that if you pay more, you should get more, and if you pay less, maybe you should expect less, that exists in everything you buy. What if the only car you could buy cost $50,000, and had a nav system, and had the bigger wheels, and the bigger engine, but that was the only car you could buy. Isn’t it nice that you can choose options on your car, and you can buy the car that you want with the features that you want?

Eric Zorn: I want to give each of you guys three minutes to wrap up, and I’ll start with you again, John Paul, to just give us a wrap up in three minutes, and then you can respond, and then maybe you can stick around, if anyone wants to stick around. I know some of you gotta get to class, so let’s begin to wrap this up, go ahead.

John Paul Rollert: So I was talking to my mom this morning, she was asking me about this debate. She’d read the article, she’s actually featured in the article. She was a stewardess herself on a very different airlines about 30 years ago. (chuckling) She asked me, knowing the intensity of discussions at the University of Chicago, if Ben fully knew what he was in for. (Ben laughing) And I said, probably not, cause it’s hard to prepare for. But there’s a wonderful quote from Ben, this is from Fox Business, a couple months ago, describing being from an Italian family, part of my family’s Italian as well, so this resonated. He said, talking about kind of these complaints, when they had conflict, you never hid from it and you never got defensive about it, you addressed it head on. And I appreciate Ben going out of his way, bringing people from his team for a very rigorous and difficult debate. And I admire that courage a great deal. Thank you for taking time out, and if I can return the favor on your turf tell me, I’d be glad to.

Ben Baldanza: Thank you very much, Professor Rollert. I want to thank you, and Eric, and all of you, for participating in what I thought was a very, very positive kind of experience. You know, at Spirit, we want to do the right thing, We think we are doing the right thing. I spent 20 years of my life working for airlines and went to bed every night thinking “How can I charge customers more and make them feel good about it?” And for the last 10 years I’ve worked at a company where I can go to bed at night thinking “How can I make it cheaper for customers? How can I let kids see their grandparents in Nicaragua, who they’ve never seen before? How can I let a small businessman who owns a plant in another state, actually visit his plant a couple of times a year?” And that’s an incredibly liberating, positive thing. Now to make that happen, we’ve got to do some things differently. But I’ll ask all of you, go to YouTube this afternoon and Google, or Google, or go to YouTube and look up Southwest 1980s bag commercial. And what you’re going to find is a commercial of Herb Kelleher’s that was run in Texas, in the 1980s, with a bag over his head. Because at that time people called Southwest “South Worst” because they were providing peanuts and no seat assignments, when the norm in the industry was a hot meal between Austin and Dallas. And what Southwest did is they took a different model that at first was misunderstood, and first thought to be really negative to the consumer, and over a number of years they converted it into the wonderful company they are today. And the reason customers love Southwest today is their expectations perfectly match the delivery of the product. And all I would say at Spirit is we are a disruptor, just like Uber is, right. (chuckling) And just like a Spotify was, and disruptors create friction at first. And at first it looks like what they’re doing is crazy, and at first they annoy taxi drivers, and they annoy media producers, and they annoy all kinds of people. But over time, if they’re doing the right thing for people, not if they’re just meeting the law, but if they’re doing the right thing, which in our case is letting people fly for less, over time, with good transparency their models come to be understood and appreciated, and Spirit is on that path. And I would posit that a few years from now we can all get back together at Booth and say, people actually used to complain about this. (audience laughing) (Ben laugh-ing)

Eric Zorn: That’s Ben Baldanza, he’s the President and CEO of Spirit Airlines. (audience clapping) This is John Paul Rollert, professor of ethics here at Booth. Thanks to everyone for (applause distorting).

Hal Weitzman: That’s it for this episode, but before we go let’s do a quick “Where are they now?”

These days Baldanza serves on various corporate boards, and is the host of the Airlines Confidential podcast. Eric Zorn took a buyout from the Chicago Tribune when it got taken over by Alden Global Capital, a hedge fund, in 2021. John Paul Rollert is CBR’s in-house ethicist, and you can hear him read his essays on many of these podcasts. As for Spirit? Well, it’s still flying, but in 2022, Jet Blue, another low-cost airline, make a bid to buy the carrier. As we record this podcast, the US Dept of Justice is attempting to block the takeover.

This episode was produced by Josh Stunkel, and I’m Hal Weitzman. If you enjoyed this episode, please subscribe and please do leave us a 5-star review. For more great debates and discussions, visit Chicago Booth Review’s website at chicagobooth.edu/review. When you’re there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research.

Until next time, thanks for listening to the Chicago Booth Review Podcast.