This is Not Your Father’s Frontier Airlines

Frontier is in the middle of making huge changes to its business model, and that is not easy to do. Anytime you make a big shift, you anger those who liked the way things were before. Frontier is learning this firsthand right now as some Denver loyalists from years past are grumbling.

Just a few years ago, Frontier was a traditional type of airline with a little Rocky Mountain flavor to it. The airline had a traditional hub-and-spoke system, but it offered great amenities like in-seat television (which it still has for a fee) and extra legroom for all seats. The operation was centered around Denver and locals treated it like the hometown airline. Frontier looks different these days and the transition isn’t done.

I wrote about this last August and pointed to Frontier’s transformation. Here’s how the route map looks today:

Frontier Route Map May 2013

What’s changed? Well, Trenton is now the airline’s second largest airport and Wilmington is starting up on the other side of Philly as well. Meanwhile, the Denver operation continues to shift toward smaller cities with less frequency and less competition. For example, Frontier was running a multi-daily schedule to Sacramento, but now it’s no longer there. Nearby, however, there are now 3 weekly flights to Fresno.

Naturally, sub-daily flights to a small city serve a very different purpose than multi-daily flights to a big city. They appeal much more to the leisure traveler than to the business traveler. So Frontier is changing how it operates, and part of that starts with how it sells tickets.

It’s clear that a lot of the airline’s traffic still comes from third party online and offline travel agents, and that is expensive for the airline. For that reason, Frontier is now making a huge push to change that. It has come up with a creative way to penalize those who book through third parties. Those who book direct get free carry-ons, full mileage credit, and free advanced seat assignment. Those who book through online travel agents don’t. It’s even painting its website on the side of its airplanes to get the point across – book direct with the airline.

Now technically, traditional travel agents can still book all the various fare families but it is clunky and requires forcing the fare in the global distribution system. People used to the old way of working with Frontier aren’t happy about that, and they’re really not happy that Frontier is telling people that booking with travel agents will get the fewer amenities than booking direct. You see a lot of talk like this from the article linked above:

“It is the biggest slap in the face to me,” said Donna Evans, another Andavo Travel affiliate based in Denver who booked an economy ticket and selected a seat for a client on Frontier using her GDS this week.

But what these travel agents don’t realize is that this is not your father’s Frontier. (Or, well, even your older brother’s Frontier for that matter.) The airline is going to continue to push more toward fewer flights to smaller cities. Even in bigger cities, it doesn’t have nearly as many flights as it used to. Look at Denver to LA, for example. Five years ago, it flew up to 7 flights a day. Now it has 4 flights on the busiest days, the same number as American. United has 7.

The bottom line is that Frontier is moving away from the business traveler’s schedule and is going to let United and Southwest fight for that in Denver. Instead, it will focus on a more profitable niche opportunity. The tricky part is that while the airline transitions, it still needs support of the travel agents in Denver. But those travel agents have to see the writing on the wall.

The biggest changes may be yet to come. Current owner Republic expects to sell the airline very soon. In the last earnings call, it was said the sale was expected to happen by July. Last we heard, the two most interested parties were also behind Spirit’s rise to ultra low cost carrier status – Indigo Partners and Anchorage Capital.

Remember when Spirit was a dinky little airline based in Detroit losing money? My how that has changed. If this change in ownership happens, more capital would flow into the airline and that will fund more rapid change. I bet we see more of the traditional Denver flying disappear in favor of other less frequent, more unique opportunities. And it’s not just flying that Denver could lose.

It wouldn’t surprise me if the airline even considered moving its headquarters elsewhere. After all, Denver is no longer the center of the universe for the airline. The mindset at the airline now is that low costs matter. And if management can find a cheaper place to base, I bet they would move. That’s the kind of airline Frontier is now.

In a couple years, I’d bet the Frontier that people remember from years past will be mostly just a memory. The Frontier of the future is one that focuses on keeping costs low in every way possible. At the same time, the airline will move into more alternate airports and smaller markets where it can be successful. Denver will be a part of it, but not in the same way people might still expect today.

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43 Comments on "This is Not Your Father’s Frontier Airlines"

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ChuckMO
Guest
Its like the 80’s all over again with the original Frontier between a rock (United) and a hard place (Continental) at DEN. Flash forward to today and replace Continental (ironically part of UA) with Southwest. As we know, that Frontier ended up being purchased by People Express, was shut down and many of the aircraft ending up at CO when they bought PE. THIS time, Frontier is fighting back by moving away from the dogfight and opening up it’s unique niche flying. They have a fighting chance this time and the numbers are showing positive results. New ownership will only… Read more »
Bill from DC
Guest
Good analogy Chuck. My thinking is that F9 might as well try something different because sticking to the model of being a full service DEN hub and spoke airline was going to send it careening down the same garbage chute as Republic’s other (former) airline, Midwest. Declaring war on travel agents might not be the smartest thing in the short run but it at least has the potential to pay longer term dividends if they get a substantial percentage of pxs to switch to this direct purchasing model (as per WN and Spirit). And, since the routing is increasingly skewed… Read more »
Nick Barnard
Member

@Bill AFAIK there was a while between the Airtran takover attempt and the purchase by Republic where Midwest was owned by some private equity firms and Northwest and flew under their own banner. Republic bought them for a brand and that was it..

Bill from DC
Guest

True, what Republic did to Midwest was inevitable at that point in time. I think it was TPG and NWA in the interim.

Nick Barnard
Member

CF, I’m curious how much of this transition would’ve happened if it wasn’t for First Data moving to a full holdback on their credit card transactions? AFAIK thats what precipitated the Chapter 11 filing a while ago.

David SF eastbay
Member

The few times a week schedules can be annoying, but there are people who are flexible and will alter their travel dates for the lowest fare. If Frontier can keep the fare low, they could make it work in the secondary city markets.

DesertGhost
Guest

This kind of transformation is preferable to the kind of transformation that would likely occur with a Chapter 11 filing.

jboekhoud
Member

Hasn’t the traditional brick-and-mortar travel agent become largely irrelevant? Now that my 65-year-old computer-illiterate father has started booking his travel online I thought they’d lost their last customer!

Seriously though, aside from corporate clients and niche markets like ultra-luxury, who still uses a travel agent?

Ron
Guest

How do you do connections with less than daily service? I guess you can connect small market to big market (e.g. Wilmington to Denver to L.A., where you can hop on a later flight if you misconnect), but what about the other direction? You’d need to allow insane margins, because it’s not reasonable to leave a person stranded for 2–3 days if they miss a connection.

David M
Guest

I’m not sure what Frontier is doing with their less than daily markets, but Allegiant doesn’t do connections at all; they target the markets they want to serve with nonstop flights. Typically, it’s small cities connecting to their bases at popular destinations. Take people directly from small cities to the places they want to go. If they need to connect to go somewhere else, Allegiant isn’t really interested in their business.

Bobsmith
Guest
Cranky, unless there is enough untapped demand, which maybe is what Frontier is looking for, does it really make economic sense to fly to destinations 3x a week rather than add an incremental flight to a busier airport? Aren’t there a number of fixed costs associated with each airport an airline serves? Or are these smaller cities, Fresno, Rockford IL, etc. giving Frontier sweetheart deals. I know there are variable costs that can be minimized with this setup (namely labor), however I’m still a bit confused. Don’t get me wrong, I like the smaller cities getting mainline service personally but… Read more »
Rob Gallavan
Guest

Any chance Frontier looks at establishing its HQ in OKC? Cheap space and plenty of expansion real estate.

ChuckMO
Guest

HQ? No way. Outside of Florida, and Vegas I don’t see much opportunity out of OKC or TUL for anyone except WN.

jboekhoud
Member

Is that a tornado joke?

Rob Gallavan
Guest

No, it was a serious question. United Airlines had OKC on the short list for its HQ years ago. Will Rogers has undergone a remodel of its terminal building and there is enough real estate to add on to it. There is also enough real estate for runway expansion. Plus, real estate is still relatively cheap compared to other large cities. With more corporations moving to downtown OKC, I thought that maybe a smaller operation like Frontier might give OKC a second look.

davidp627
Member

Frontier is doing what SWA used to do, i.e. blanketing the major ‘hub’ airports.

Davywavy
Member
It has long been the Conventional Wisdom that DEN cannot support three hubbing airlines, and perhaps it can’t – if all three airlines are flying to the same places, carbon-copying each other. But what if they are not all flying to the same places? Throughout the MKE/MCI Follies, DEN was the glue that held Frontier (as opposed to rump Midwest) together). The Airbus fleet at DEN was profitable when nothing else was and that is core on which this new Frontier is based. The smartest (and bravest) thing Siegel/Shurz did was to remove Frontier, as far as possible, from the… Read more »
Name
Guest
Boy were we excited when Frontier came to Bellingham, WA. We’ve got lots of flights to Hawaii and Calif., Nevada, Arizona, but nothing to the East since Delta pulled out. The prospect of being able to connect into a national network and fly to the East Coast without stopping at SeaTac is pretty cool. And, for our friends in Denver, it’s mighty convenient for them to hop a quick BLI-SEA flight. But, I discovered last night that Frontier is no help for getting my cousins in Raliegh-Durham out to Bellingham for a wedding this summer. Frontier only flies to Trenton… Read more »
Elliott
Guest

Above comment was from me, name got deleted somehow

Davywavy
Member

Allegiant is one of the models, as Frontier moves to become ULCC. Spirit is another.

It is a pity about your cousins, but Frontier does not fly non-stop TTN-DEN anyway because, as above, the runway length at TTN cannot support such long flights.

David M
Guest

If the investors backing Spirit acquire Frontier, and with Frontier already remaking itself in Spirit’s image, and with Spirit and Frontier both operating Airbus fleets, is there any reason for Frontier and Spirit to not be eventually merged together?

Davywavy
Member
Yes – Republic and the often under-estimated Brian Bedford. The word “sale” is freely bandied about but BB has usually (not always) called it separation, and in the best interests of RJET shareholders. So the original plan, as defined by him after the FAPA agreement in early 2011 holds, and I have seen nothing to change it – that by the end of 2014, Republic will become a minority shareholder in Frontier, and will make its money, real money, from an IPO. This implies that Frontier has to be a standalone, not a merged airline. And, assuming they stick to… Read more »
PF
Guest

This far from the Frontier in the late 70s; the meals were memorable, including and a bottle of (not so memorable) Mateus Rose and a wine glass on the trays.

ChuckMO
Guest

Two different companies, vastly different market these days. No premier carrier survived the bloodbath: Air1, MGM Grand, Regent, McClain, UltrAir all gone. Midwest lasted the longest, and we know how that turned out. WHY they introduced that Saver Service on an entire MD80 without keeping a segment of the aircraft for their Signature Service was really the beginning of the end for YX IMHO. The longest flights in the system without Biz Class. STUPID!

kelty
Member

The model for smaller airlines to serve smaller cities may be a good niche. It’s not just leisure travelers who fly, but business people who can adjust their schedules to the days the airlines fly.

A fond memory: Some years ago I flew Frontier, and the elderly gent ahead of me got a farewell kiss from the stewardess as he debarked. I complained, and she gave me equal treatment. Always liked Frontier.

Momus
Guest

I’m still trying to figure out how Fresno is “nearby” to Sacramento??

Trent880
Guest

I don’t know that F9 was ever really supported as the “hometown” carrier, by the city and airport. It seemed to be tolerated as the hometown carrier at best, until the hometown got what they really wanted, WN.

Jason
Guest

What do you think of Frontier’s chances at Delta’s CVG fortress? I think if they can hold out until Delta’s leases on concourse B expire in 2015 they’ll make it. DL is down 500 flights a day from the peak but we still have a lot of directs. I think those evaporate in 2015 when DL doesn’t have a whole concourse to fill. I hope Frontier hangs on and my fellow residents help them do it.

Tom Martin
Guest
If you look at RJET’s contract route map and Frontier’s route map, several routes overlap. It seems to me, they end up competing with themselves since they fly for UA in DEN. I think they have the right idea, moving to the smaller cities. I would love to see them in LGB again. They will claim the service did not do well. Should they consider the schedule the flew at LGB?? An RON (XSAT)/Kickoff (XSUN), and a morning turn that operated only two days a week. Really?? RJET also made a HUGE blunder by keeping planes painted MIDWEST. Frontier has… Read more »
Yossi
Guest

Dear Arcanum,
Many people use Travel agents and not just for Luxury Travel.
We have groups, weddings and just folks who want to arrange their cruise or all inclusive tours and safari. No they don’t call for a ticket from Denver to Omaha. The professional travel agents are live and well making good money too. Customers who appreciate personal service without the extra cost use us on a regular bases. :-)

Eric R.
Guest
I live fairly close to TTN, and I have seen the difference Frontier has made; people are even using for business trips – a couple of people I know have used it for business to RDU, since that is (almost) daily. As far as the strategy goes, I am wondering what Frontier will do at TTN after the fall closure. Supposedly, they are revamping the terminal to provide a second gate by moving the baggage handling outside (and um, adding bathrooms…). The problem is that there is still only so much seating, so it is hard to see them having… Read more »
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