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Spirit Airlines CEO: 'Don't Blame Us for Low Airfares - Blame the Majors'


Spirit CEO Bob Fornaro

Airline fares have been declining and the big three carriers have been quick to blame competition from ultra-low-cost carriers to the point that all three are making plans to introduce or expand "basic economy fares" in order to compete.

But Spirit (SAVE - Get Report) CEO Bob Fornaro said it's not the ultra-low-cost carriers, primarily Spirit and Frontier, that are ramping up the ultra-low fares; rather, it's the legacy carriers themselves.

"They've extended it beyond Spirit -- it's among themselves," Fornaro said Tuesday on Spirit's first-quarter earnings call. "It's the reason {they} are not seeing improvement" in passenger revenue per available seat mile.

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Moreover, Fornaro said, once basic economy fares are implemented, they are likely to help Spirit, not hurt it.

American (AAL - Get Report) , Delta and United continue to report that PRASM is in negative territory -- which is to say that it continues to be lower...