US budget carrier Spirit expects to raise fares on higher oil prices

Spirit Airlines expects it will raise passenger fares after years of lower ticket prices as the US budget carrier works to improve margins at a time of rising oil prices, CE Bob Fornaro said Monday. The ultra-low-cost-carrier’s average fare is lower today than in 2016 because of fierce competition, a drop that’s “eating into margins,” Fornaro said. Fornaro, who is leaving Florida-based Spirit at the end of the year, did not say how much fares could rise but suggested any increase would be modest. “Fare increase for us could come in the ancillary bucket or even the average price,” he said. “We don’t need big increases. But small numbers can make big differences for us.” North American carriers are still growing their networks but adding less capacity this year than expected, as higher oil prices pressure margins. Earlier in the day, Fornaro said Spirit is talking to manufacturers about a future fleet order. Spirit, which operates an all-Airbus fleet, expects to have 175 planes by 2021 but will need new aircraft for fleet growth and to replace aging jets, said Spirit CFO Ted Christie, who will succeed Fornaro as CEO.<br/>