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Breaking News: Airline Tanks, CEO Resigns

SmarterTravel

Accountability. In the business world, it means that there’s a link between a company’s fortunes and the fortunes of its top executive. If the company prospers, so does its chief. And the converse: If the company suffers, its CEO does as well.

It’s an intriguing concept, but in reality, it seems that it’s all upside for executives. They’re richly compensated whether their companies do well or do poorly. Heads they win; tails they still win.

The accountability link is especially tenuous between customer satisfaction and management compensation. While a falloff in a company’s stock value might at least raise some eyebrows, substandard customer reviews are routinely given a blind eye.

Spirit is a prime example. The company is consistently ranked at the bottom of traveler surveys and regularly generates more complaints than its industry peers. But so long as the company’s financials remain strong, Spirit’s management gets a pass, and big paychecks.

As a reminder that accountability is more than an academic notion, there are exceptions to the too-big-to-fail rule for corporate executives.

On May 13, the same day that J.D. Power released a survey ranking Frontier last in customer satisfaction, the airline announced that its CEO, Dave Siegel, was quitting for “personal reasons.”

The real story, almost certainly, is that Siegel was fired because under his watch Frontier was going to hell in a hand basket. (Compounding the J.D. Power survey’s indictment, a DOT report this week pegged Frontier as the most complained-about airline.)

For the time being, Siegel’s responsibilities will be split between Bill Franke, the airline’s chairman, and Barry Biffle, its president.

It’s anybody’s guess whether they’ll be able to rescue Frontier from its current operational and reputational funk. But the airline is doing just fine financially—a $129 million profit on $1.57 billion in revenue last year—and under the no-accountability rule, that will probably be enough to keep them at the helm indefinitely. No matter what customers say.

This article originally appeared on FrequentFlier.com.

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