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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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