Deutsche Bank: Spirit Needs To 'Reset' Investor Expectations

Deutsche Bank released a report highlighting Spirit Airlines Incorporated SAVE after the company announced Bob Fornaro would succeed Ben Baldanza as President and CEO. Analysts Michael Linenberg, Richa Talwar, and Catherine O'Brien highlighted four key issues that the new CEO needs to address to improve Spirit in 2016. 1. Reset investor expectations Deutsche Bank believes that while the ultra low-cost carrier business model has been proven successful, the new CEO needs to address how he plans to accelerate growth rates and capital deployment. 2. Improve Spirit's operations Analysts noted that there have been reports of higher than expected flight cancellations and late arrivals and departures. For Spirit to continue to be profitable and retain high customer satisfaction Deutsche Bank believes that these issues are very important. 3. Plans to improve growth Deutsche Bank believes that Spirit needs to focus on their competitive advantages which is offering the lowest fares. Analysts believe that to continue to grow Spirit may have to offer more routes, buy more planes off lease, or improve operational efficiency. 4. Rethinking their market choices Deutsche Bank believes that the three main markets that Spirit operates within includes "visiting friends and relatives," small town to leisure markets," and "big city-pair markets." Analysts believe that Spirit may want to focus their business and market efforts on one of the key markets to improve profitability. Currently, Spirit Airlines is trading at $37.83, down 2.73 percent.