It’s not often that I find a reason to write about Houston twice in one week (or one decade), but sure enough, here we are. Frontier announced yesterday that it would move back from Houston’s Hobby Airport to Intercontinental. Even for people who don’t care about Houston, this is a strategic move worth discussing. It says a lot about how Frontier and Southwest operate as airlines.

Frontier decided to move its three daily Denver-Houston flights from Intercontinental to Hobby back in November 2010. At the time, the rationale given was that “Hobby offers Frontier’s guests easy access to downtown Houston and many popular tourist attractions in the area.”

For an airline that’s used to competing with United in Denver, that makes sense. This move gave Frontier an opportunity to differentiate itself from United’s service to Intercontinental by going elsewhere. Trying to serve Denver-based travelers meant Frontier was smart to look for a more convenient option. Hobby was also cheaper, but not by a ton. In 2010, the cost per enplanement at Hobby was $9.44 versus $11.06 at Intercontinental.

Here we are less than two years later and Frontier is switching back. What’s changed? A few things, I’d say.

Most importantly, Frontier is a different kind of airline today than it was just two years ago. It is now on its quest to be an ultra low cost carrier. You would think that would mean operating at the lowest cost airport, but the difference between Intercontinental and Hobby is not that great in the scheme of things. (It’s not like the deep chasm between Ft Lauderdale and Miami, for example.)

At Hobby, Frontier could have undercut Southwest. Southwest is hardly the low fare leader it once was, and that might not be hard to do, but what is hard to do is overcome Southwest’s perception as a low fare leader. Southwest’s roots run deep in Houston, and the roots are going deeper every day in Denver as well. If people want to go to or from Houston Hobby, they first think of Southwest. And since Southwest doesn’t participate in any online travel agent systems, people are going directly to Southwest.com to book.

That’s not to say that Frontier couldn’t have won some business by having a lower fare, but there’s just too much noise from Southwest there and it’s probably not a winning battle.

Intercontinental, on the other hand, looks like a low cost carrier’s paradise. It’s not insanely expensive to operate there, but more importantly, as Frontier notes in the second sentence of its press release, “Frontier will be the only domestic low-cost carrier at Bush Intercontinental.” It had to say “domestic” because VivaAerobus flies to Monterrey, Mexico. For the many people who think of Intercontinental first, those who maybe live on the north side or simply think northward, Frontier now has some real opportunity to go in and make some waves without Southwest creating problems.

This is exactly what Spirit has done at O’Hare, DFW, and many more. It goes where the big guys are, where the bulk of the traffic lies, and undercuts the heck out of it.

Frontier is, to be fair, a different animal. (Sorry, I know.) It isn’t quite running that same barebones schedule that Spirit flies. Frontier also can connect people via Denver to a lot of places. It’s something of a hybrid at this point, so United might be more interested in responding. But then again, United might not want to really get into a fare war on what should be a very profitable hub-to-hub route. It’s not like a move by United is really going to push Frontier to walk away from Houston. If Frontier starts growing further in Houston, then maybe United would be more concerned, but it shouldn’t be wasting its time on this one route.

Where does this leave Hobby? It leaves it in the same place we see Love Field, Midway, Oakland, you name it. Southwest has done an incredible job of effectively becoming a monopoly carrier at these airports and that’s a nice position to be in for an airline. Sure, JetBlue is still at Hobby, but would it stay if Southwest started flying from there to LaGuardia? I’m not so sure. Other than that, it’s just regional jets on American to DFW and Delta to Atlanta. Pretty sparse.

So, Southwest will continue to have what’s effectively its own airport on the south side while everyone else stays north.

Delta started a test a couple weeks ago of a new fare offering called Basic Economy. The idea is that it’s a highly restricted fare that gives you nothing more than the promise of some seat on the airplane. It’s not a bad plan at all, but it shines yet another light on how poor the booking experience is becoming with online travel agents, Travelocity being the only one to have tried to address the issue so far.

Basic Economy was first rolled out in the Detroit to Orlando, Ft Myers, Ft Lauderdale, and Tampa markets. If you’re surprised by those markets, don’t be. Those all have multiple flights per day on Spirit, and Delta must be concerned that it is losing out on passengers to fill up the back of the bus. So it introduced Basic Economy which has the following rules:

• No changes are permitted at all
• Fare are completely non-refundable
• Seats are randomly assigned at check-in and cannot be changed
• All fares on a reservation must be Basic Economy (no mixing with other fares or other airlines)

You can buy some of what Delta is now calling “Trip Extras” to add on with things like priority boarding, etc, but that’s about it. It’s a highly restricted ticket. Delta shows it this way on its website:



It’s very clear what you’re getting when you book this way, so there won’t be any surprises. But what about those who book through an online travel agent? Looking at the four big guys, Expedia, Orbitz, Priceline, and Travelocity, only Travelocity made any attempt to show that this fare was different than others. Here’s how they break down, from worst to best.

Priceline
Priceline is by far the worst here, because not only does it not make any effort to disclose that there are extra rules here, but it actually makes you think you can choose seat assignments in advance. After going through the entire booking process, Priceline presents a link to the raw fare rules and restrictions as filed by the airlines and leaves it up to the traveler to decipher it. Priceline asks if you want to assign a seat, and then lets you pick from the seat map. Undoubtedly, that will get bounced out by Delta later, but will the traveler even know?

Orbitz
Orbitz, like Priceline, makes you go through the whole booking process before it shows you a link to the airline-filed rules on the payment screen. This is incredibly frustrating because you have to go through multiple pages of upsell attempts before you can find the rules, if you would even bother to pull up the link that’s buried. I can’t imagine anyone is doing it.

Expedia
Expedia is only slightly better than Orbitz because it brings the link to the rules page further up front. Right on the flight details page after you pick your flights, you’ll find the link, which again goes to airline-filed rules. This is at least much easier to access because it’s earlier in the booking process.

Travelocity
Travelocity is the only one that makes any attempt to differentiate the fare in the fare display itself, so it should receive kudos for that.



It’s not perfect, especially since it appears that the link is broken, but I imagine if it worked, it would link to a page or pop-up that would show all special restrictions on the fare.

–

I understand how difficult it is for online travel agents to try to make sense of all the different rules that different airlines put out there, but even something as simple as what Travelocity has done will make a tremendous difference.

I spoke with Ben Baldanza, CEO of Spirit Airlines, when I was at the Phoenix Aviation Symposium and asked him how many of his bookings came from online travel agents. He said it was around 25 percent, but he noted that 100 percent of the complaints about the airlines policies are from those bookings. People who book direct have a very clear understanding of what’s included and what’s not on every airline website. The online travel agents, however, aren’t keeping up with changes in this industry.

And this isn’t limited to just online travel agents. Metasearch sites like Kayak are also not doing a good job. Kayak shows you the Delta fare without any details at all. The difference is that it sends you to the Delta website, but it deeplinks you. So you do see that the ticket is non-changeable in small type but you don’t get that clean display that you would if you went to Delta.com directly.

Travelocity certainly deserves credit for at least doing something about this problem, but there’s more that needs to be done. If nothing changes, then online travel agents will make themselves more and more irrelevant as time goes on.

Frontier’s Animal Battle: Choose the Airline’s Newest Mascot – Conde Nast Daily Traveler
If you haven’t seen Frontier’s latest battle for the next animal mascot, it’s worth a look. I couldn’t stop laughing at the first audition reel.

In the Trenches: The Training Bottleneck – Intuit Small Business Blog
My new employee has started, but there’s a ramp-up bottleneck when it comes to training. We’re just pushing past it as quick as we can.