Sky's The Limit

The Detroit-based trucking service Homfeld founded while he was in college in 1969 delivered parts to auto plants in Detroit and Cleveland. His biggest client was Chrysler. "And as Chrysler went, so went we," says Homfeld. Unfortunately for his business, auto production slowed dramatically during the OPEC oil crisis of 1976. "Suddenly, there was very little need for our services. Within a week's time, our whole business was brought to its knees. There was no cushion, nothing gradual about it," he says. "I was just a 23-year-old guy, and I had no idea that could happen."

Instead of giving up, however, Homfeld converted his business into a factoring company. He began to purchase accounts receivable from commuter airlines, small airfreight forwarders and other trucking companies. Homfeld reasoned that if he was able to collect his own bills, why wouldn't he be able to expand to help other companies? Thus he set the stage for a life of entrepreneurial endeavors that has served him well. "We changed who we were to accommodate the times," Homfeld, 46, says. "My lesson from the OPEC crisis was never to put all my eggs in one basket."

In 1981, as Homfeld's profits soared, a company seeking financing to expand its air-charter operations approached him for help. He passed on providing financing--but liked the idea of an air-charter service and started his own operations, flying into Atlantic City using airplanes owned by other companies. He called his service Charter One.

Charter One provided public charter day trips from Chicago to Atlantic City, geared to the needs of the casino-bound. In 1986, Homfeld added trips from Boston to Atlantic City twice a month. By 1989, the company was operating that route daily.

In 1990, Charter One received its FAA certification as a scheduled service carrier and that same year, Homfeld made his first jet purchase: two Convair 580s. Making use of the customer base Charter One had established, Spirit Airlines was born in 1992. In 1993, Spirit initiated flights from Atlantic City and Detroit to Orlando, Tampa, Fort Lauderdale and Fort Myers, Florida. This year, service from Newark, New Jersey, to Orlando was introduced.

Spirit is not really a niche carrier, however. "We're a `niches' carrier," Homfeld says. "The object is to develop a multitude of niches. That way, if a bigger, deeper, stronger competitor comes into [a given market], they can only hurt that particular market. We have roughly half a dozen niches now, and we're steadily trying to develop more." Emphasis on steadily. Homfeld's one-step-at-a-time approach is the dominant factor in the success of a man whose business has rendered a profit in all but two quarters of the past decade.

As a company that's always looking for a vacuum to fill, the point isn't to be the biggest and baddest. "It's about making a profit," says Homfeld. "[We're] filling in the cracks where there's no service or where more service is needed. Our low prices encourage short vacations and multiple trips. Spirit's passengers [tend to] fly with great frequency."

This article was originally published in the August 1999 print edition of Entrepreneur with the headline: Sky's The Limit.